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Entries in Profits (10)

Friday
Aug242012

AIG Bailout Leads to $17.7 Billion Government Profit After TARP

STAN HONDA/AFP/Getty Images(NEW YORK) -- The federal government has sold off the remainder of its AIG securities for a surprise $17.7 billion profit, the latest piece of the controversial TARP government bailout to make a profit.

The AIG profit, announced by the Federal Reserve Bank of New York on Thursday, came as the Republicans have made the expensive federal bailout a campaign issue.

The black ink surrounding the American International Group was a surprise because analysts had initially thought that much of the government's AIG investment would never be recovered.

The New York Fed said it has sold the remainder of the AIG securities for a net profit of $17.7 billion, including $8.2 billion in interest and fees.

"We've made significant progress winding down TARP's investment programs and recovering taxpayer dollars," said Treasury spokesman Matt Anderson.

The government initiated a multi-stage rescue of AIG through both the Federal Reserve and Treasury, which committed $112 billion and $720 billion to total TARP funds, respectively.

The Treasury still has $24.2 billion left in its principal investment in AIG that is outstanding. That is backed by 871 million shares of common stock, worth around $30 billion depending on market conditions.

Despite the good news about AIG, the Treasury still estimates the total loss from TARP is $63.5 billion, most of which is committed to housing programs.

In comparison, the government has taken a hit so far with its auto rescue and the Treasury said it expects a $25 billion loss when it completes its exit from the car companies.

TARP invested $80 billion in General Motors, Chrysler and GMAC, now known as Ally. To date, the government has recovered about half, or $41 billion, from the auto companies. The Obama administration also estimates that it saved one million jobs in 2009 by saving the auto companies from collapse.

The government is still winding down other programs as part of TARP, including its investment in about 700 banks of all sizes. To date, the Treasury has made a profit of $21 billion from its investment of $245 billion.

The Treasury also estimates a profit of $3 to $4 billion in its credit market programs.

There's at least one other area of TARP from which the government never expects to recover funds, the $46 billion foreclosure prevention programs that offered aid to homeowners.

Copyright 2012 ABC News Radio

Thursday
Feb162012

GM Posts Record $7.6 Billion Profit

Bill Pugliano/Getty Images(LAKE ORION, Mich.) -- General Motors earned a record $7.6 billion profit last year, the highest profit in the company’s 103-year history. It sold 640,000 more cars and trucks in 2011 than it did in 2010 and took in a total of $105 billion.

Jeremy Anwyl, vice chairman of Edmunds.com, said while he is buying GM’s immediate success, he is not sold on the company’s future.

“The question for me about General Motors really is: Are they going to be able to sustain this momentum over the long haul?” Anwyl told ABC News. “If we are going to step back and say, ‘Was the bankruptcy a success or was it a failure?’ it’s really too early to say. We need to let a few more years pass to see if the new GM really is a new GM.”

To date, GM has paid back $26 billion of the $49.5 billion bailout and U.S. taxpayers still own 30 percent of the company in stock.

For the workers at GM’s plant in Lake Orion, Mich., this GM is much better than the GM that halted production there in 2009. Today, the plant is up and running, turning out 800 cars a day and employing 2,200 people.

GM says 47,500 blue collar workers, many of whom took pay cuts of up to 40 percent and cuts in benefits as part of the bailout, learned Thursday that they are receiving profit-sharing checks of up to $7,000.

GM employee Doreen Stover said her check is already spent.

“We get caught up on some bills -- and get my new GM vehicle,” she said.

The company’s turnaround is because of increased sales in North America and China. In China, GM’s Buick Excelle is the most popular car on the market and one GM car or truck is sold in the country every 12 seconds.

Despite all the success, Anwyl said, the road ahead for GM will not be easy:

“GM is going to find a much more competitive market environment than they have during the last couple of years, and that is going to test their ability…to continue to sell vehicles and be able to control costs, particularly incentive costs.”

Copyright 2012 ABC News Radio

Tuesday
Jan102012

Federal Reserve Transfers $76.9 Billion Profit to Treasury

Adam Gault/Thinkstock(WASHINGTON) -- The Federal Reserve turned $76.9 billion in profits over to the U.S. Treasury Department in 2011, The New York Times reports. Federal law requires the central bank to consign its profits to the Treasury annually.

Despite turning in $2.4 billion less than in 2010, last year's transfer far surpasses those prior to the 2010 record.  In the years leading up to the financial crisis, the Fed's average annual contribution was $23 billion.  After 2007, these contributions grew larger with the average soaring to $54 billion, according to the Times.

The Times reports nearly 97 percent of the central bank's income was made as a result of interest payments on investments, including Treasury and mortgage-backed securities.

Copyright 2012 ABC News Radio

Friday
Apr292011

Oil: Big Five Report $34.2 Billion in Profits

Jupiterimages/Thinkstock(SAN RAMON, Calif.) -- On Friday, Chevron reported $6.2 billion in profits in the first quarter of 2011, bringing total profits for the five largest oil companies to $34.2 billion -- or some $379 million each day. Profits were up 42 percent from the same period a year ago.

AAA’s daily gas price measure shows a national average price for regular at $3.91, up six cents from a week ago. With oil prices trending slightly higher Friday, it appears that Monday’s official gas price report will also be up.

Copyright 2011 ABC News Radio

Thursday
Apr282011

Gas Earnings: Exxon Profits Up 69%, Shell Up 30%

KAREN BLEIER/AFP/Getty Images(WASHINGTON) -- Exxon Mobil and Royal Dutch Shell reported first quarter profit increases Thursday of 69 percent and 30 percent, respectively, from the same period last year. With rising gas and oil prices, analysts expected the five biggest oil companies -- with Exxon as the largest -- to report that they are swimming in revenue.

Exxon earned $10.7 billion in the first quarter, up from $6.3 billion. Shell announced profit of $6.3 billion in the first quarter this year, up from $4.8 billion.

BP and ConocoPhillips announced their first quarter earnings Wednesday, in a week when the biggest oil companies have begun to release their 2011 profits. The "Big Five" oil companies include BP, Chevron, Conoco Phillips, Exxon Mobil and Shell.

ConocoPhillips said its first quarter earnings increased 43 percent to $3 billion from $2.1 billion in the same period last year. BP's first quarter earnings dipped this year -- $5.48 billion compared with $5.60 billion during the first quarter a year ago -- including a charge of $384 million related to the oil spill in the Gulf of Mexico.

Valero Energy, based in San Antonio, Texas, and the largest independent U.S. refiner, announced Tuesday a first quarter profit of $98 million "primarily due to higher margins for diesel and jet fuel," compared to a first quarter loss last year of $113 million.

Chevron, based in San Ramon, Calif., is slated to announce its earnings on Friday while Marathon Oil, based in Houston Texas, will announce its earnings Tuesday.

The national average for regular gas is $3.88 a gallon, the highest since August 2008, according to the Department of Energy this week.

Copyright 2011 ABC News Radio

Tuesday
Feb082011

Toyota's Nine-Month Profits Quadruple Despite Drop in Third Quarter

Photo Courtesy - Ted Aljibe/AFP/Getty Images(TOKYO) -- Toyota Motor Corporation released its latest financial report Tuesday, announcing its net income -- despite dropping close to 39 percent in the third quarter -- nearly quadrupled in the nine months leading to the end of 2010.

The Japanese automaker said its net income for the nine months leading to Dec. 31, 2010 went up to 382.7 billion yen from last year's total of 97.2 billion yen.

"Strong vehicle sales, especially in emerging markets such as Asia, Central and South America, and Africa, contributed to the increase in operating income in the nine-month period," TMC Senior Managing Director Takahiko Ijichi said.  "These regions are now increasingly representing one of the pillars supporting our earnings."

The increase comes after Toyota reported its net income dropped to 93.6 billion yen in the third quarter from 153.2 billion yen during the same time period the year before.

Forecasting the new fiscal year, Ijichi said, "In addition to an improving vehicle-sales outlook in Japan, Asia and Russia, the progress of our company-wide profit improvement activities, such as further reduction of variable costs and control over fixed costs, has exceeded our earlier expectations.  As a result, we now expect to overcome the rapid and acute yen appreciation and achieve a substantial increase in operating income.  One can therefore see that our earnings are firmly recovering."

Copyright 2011 ABC News Radio

Friday
Jan142011

JPMorgan Chase Reports Strong Earnings

Photo Courtesy - Getty Images(NEW YORK) -- On Friday, JPMorgan Chase & Co. announced earnings of $4.8 billion in its fourth quarter of 2010, a 47 percent increase compared to the $3.3 billion the company reported for the fourth quarter of 2009.

"Solid performance in the quarter and for the year reflected good results across most of our businesses,” said CEO Jamie Dimon in a press release on Friday.

“Credit trends in our credit card and wholesale businesses continued to improve. In our mortgage business, while charge-offs and delinquencies have improved, credit costs still remain at abnormally high levels and continue to be a significant drag on our returns," Dimon said.

Dimon said the company weathered the “worst economic storm in recent history,” noting there are “signs of stability and growth returning to both the global capital markets and the U.S. economy.”

Copyright 2011 ABC News Radio

Thursday
Jan132011

Intel Earnings Report: 2010 Most Profitable Year in Company's History

Photo Courtesy - Intel Corporation(SAN FRANCISCO) -- Intel predicts that 2011 will be a good financial year after reporting a record-setting 2010.

"2010 was the best year in Intel's history.  We believe that 2011 will be even better," Intel CEO Paul Otellini said in a statement.

Intel Corporation netted $11.7 billion last year, up 167 percent from 2009.  But despite being the world's largest provider of PC processors, the company has yet to gain a competitive advantage in smartphones and tablets -- a trend growing increasingly popular with consumers who desire a more portable means for computing.

The technology company's outlook is optimistic though.  Intel expects to earn revenues of around $11.5 billion in the first quarter alone.

Copyright 2011 ABC News Radio

Thursday
Nov252010

US Corporate Profits Soar, But Unemployment Rate Refuses to Budge

Photo Courtesy - Getty Images(NEW YORK) -- While Wall Street was celebrating good news about corporate profits this week, millions of Americans will sit down at Thanksgiving Dinner tables the same way they did last year -- without jobs.

Unemployment remains stuck at a stubborn nine percent, but corporate profits broke records in the third quarter of this year, surpassing $1.6 trillion.  That's the highest profit level ever, not adjusted for inflation.

With the whiff of mega-million dollar bonuses in the autumn air, some top executives are celebrating lavishly, just as they did before the recession.  Expensive restaurants are pulling in crowds again, and Sotheby's auction house says bids for its expensive paintings and wares are "pouring in."

Then there's Fred Clark, who was laid off from his job as a logistics manager for United Technologies a few days after Thanksgiving 2008.  He had worked at the company for 19 years.  Two years later, he's still unemployed.

"I hope to get a job" in 2011, Clark said.  "I have to believe that."

But for Clark and millions of other out-of-work Americans, it's hard to stay optimistic.  Though the government says the recession is officially over, long-term joblessness remains high and income disparity, what the richest Americans make compared to everyone else, is as great as it has ever been.

Copyright 2010 ABC News Radio

Tuesday
Oct192010

Trade Group Reports Passenger Revenue Growth for Airlines

Photo Courtesy - US Airways(WASHINGTON) -- Airlines continue to make money and are charging you more to fly, according to the Air Transport Association.  The industry trade group announced that passenger revenue was up 19 percent in September 2010 compared to the same month last year.  Meanwhile, the average price to fly one mile rose 11 percent.

"Once again, the global economy is driving spending on air travel, with passenger revenue exceeding last year's depressed levels," said ATA President and CEO James C. May.  "The industry remains hopeful that the nation's economic recovery will progress in the months ahead."

Carriers began cutting capacity in 2008 in the face of a down economy and sky-high fuel prices.  They have held the line on adding flights back, which is one reason they are making money and charging more for tickets.

Airlines are expected to begin releasing their third quarter financial data Wednesday.  Some analysts have already predicted that this will be a very strong quarter for the airlines.

FareCompare CEO Rick Seaney told ABC News that he does not expect to see these kind of profits going forward, however. 

"Summer was a very special thing where a lot of people didn't take their trips last summer. ... Airlines are not putting back seats into their system because they're afraid of what's going to happen in the economy," Seaney says.

Copyright 2010 ABC News Radio







ABC News Radio