World financial news

Home Depot says its fiscal first-quarter profit climbed 27.5 percent as warmer weather brought consumers out for spring gardening and lawn products.

The world’s biggest home-improvement company also boosted its 2012 financial outlook Tuesday, citing its year-to-date performance.

But the Atlanta retailer’s quarterly revenue results and its full-year revenue guidance fell short of analysts’ expectations. Its stock dropped 3 percent in premarket trading.

Home Depot Inc. reported net income of $1.04 billion, or 68 cents per share, for the period ended April 29. That’s up from $812 million, or 50 cents per share, a year earlier.

The latest results beat the 64 cents per share that analysts polled by FactSet expected.

“We saw a stronger-than-expected start to the year, driven by record warm weather and continued demand for core products,” Chairman and CEO Frank Blake said in a statement.

Revenue rose 6 percent to $17.81 billion from $16.8 billion. But that missed Wall Street’s estimate of $17.89 billion.

Home Depot’s shares fell $1.50, or 3 percent, to $48.38 ahead of the market opening.

Revenue at stores open at least a year rose 5.8 percent, with the metric climbing 6.1 percent for U.S. locations.

This figure is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.

The company expects fiscal 2012 earnings of $2.90 per share, with revenue up about 4.6 percent. This implies revenue of approximately $73.66 billion. Home Depot previously predicted earnings of about $2.79 per share and a 4 percent revenue increase.

Analysts had expected earnings of $2.90 per share on revenue of $74.06 billion.

Home Depot has 2,254 stores in 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico and China.

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Critical last-ditch talks to form a coalition government in crisis-struck Greece foundered once more Sunday, leading the country one step closer to new elections, although the socialist party leader said he retained “existing but limited’ optimism for a deal.

The political uncertainty has alarmed the international creditors who have given Greece billions of euros in bailout loans over the past two years, and has thrown the country’s continued presence in the European Union’s joint currency into serious doubt.

President Karolos Papoulias convened the heads of the parties that came in the top three spots in last Sunday’s inconclusive elections, in an ultimate effort to broker an agreement after a week of talks led to deadlock.

The meeting ended without a solution, but the process continued Sunday evening with the president meeting individually with the leaders of smaller parties that made it into parliament. Those include the extremist right-wing Golden Dawn, whose head, Nikolaos Michaloliakos, caused a furor by giving a fascist salute during an Athens city council meeting last year. The party won 7 percent of the vote in the elections.

Voters furious at the handling of Greece’s financial crisis and two years of harsh austerity measures taken in return for billions of euros in international bailout loans punished the formerly dominant socialist PASOK and conservative New Democracy parties in the elections. The two saw their support crumble to the lowest point in decades, while Radical Left Coalition, or Syriza, made big gains to come in second place after campaigning on an anti-bailout platform.

The PASOK and New Democracy leaders could form a coalition with the smaller Democratic Left party of Fotis Kouvelis _ combined they would have 168 seats in the 300-member parliament. New Democracy won 18.9 percent last Sunday while PASOK garnered just 13.2 percent, compared to nearly 44 percent in the last elections in 2009. Kouvelis’ 6.1 percent put him in a kingmaker position, with 19 seats.

But all three insist any power-sharing deal must include Syriza, led by the 38-year-old Alexis Tsipras, given its strong showing at the ballot box.

Tsipras, however, insists he cannot join or even lend his support to a government that will continue implementing the terms of Greece’s international bailout. In return for euro240 billion in rescue loans from the European Union and International Monetary Fund, Greece has imposed severe spending cuts, including slashing pensions and salaries in the public sector, and repeated rounds of tax hikes. The measures have left Greece mired in a fifth year of deep recession, with unemployment spiraling above 21 percent.

“The three parties that have agreed on a two-year government in order to apply (the bailout) have 168 seats in parliament,” Tsipras said after the meeting. “Let them go ahead. Their demand that Syriza participate come what may in their own agreement is senseless and unprecedented.”

Tsipras insists the terms of the bailout must be cancelled payday loans. PASOK head Evangelos Venizelos, who spent nine months handling the crisis as finance minister, and conservative leader Antonis Samaras, say that position is irresponsible and will force Greece out of the euro. Although Sunday’s meeting convened by the president with the three top party leaders was inconclusive, Venizelos said that “I retain some limited but existing optimism that a government can be formed.”

Samaras appeared more pessimistic.

“I made every effort for the cooperation of all,” he said. “Syriza didn’t listen to the mandate of the Greek people and does not accept not only the formation of a viable government, but not even the tolerance of a government which would in fact undertake to renegotiate the terms of the (bailout) and the loan agreement.”

Tsipras, however, stuck to his position, insisting that supporting a pro-bailout government would be a betrayal of his pre-election platform.

“After today’s meeting it is obvious they are demanding that Syriza become an accessory to a crime,” he said after the discussions with the president. “In the name of democracy, of our patriotic duty, we cannot accept this shared guilt. We call on all Greeks to condemn once and for all the forces of the past and to realize that only one hope remains: unity against blackmail in order to prevent the continuing barbarity.

“Fellow Greeks, we can assure you of one thing: we will not betray you.”

Tsipras will also have his eye on recent opinion polls which show his party would gain strength if Greeks go to the ballot box again next month.

A poll published by To Vima newspaper Sunday indicated Syriza would come first in new elections with 20.5 percent of the vote _ less than the 28 percent an earlier opinion poll published Thursday gave him, but still well ahead of New Democracy. Although it would not be enough to form a government, it would put him in the dominant position to form a coalition with smaller anti-bailout parties.

To Vima’s poll, carried out by Kappa Research, showed New Democracy in second place with 18.1 percent and PASOK losing yet more votes to reach 12.2 percent. The poll was carried out on May 9 and 10, and had a margin of error of 3.09 percentage points.

Attention Sunday night will be focused on the president’s meeting with Kouvelis. First in for the evening round of meetings was Panos Kamenos of the anti-bailout right-wing Independent Greeks party, to be followed by Communist Party head Aleka Papariga and then Michaloliakos.

Papoulias’ mediation to broker a deal could in theory continue until May 17, the scheduled opening date for the new parliament, although they are expected to end sooner. If no agreement is reached, Greece will have to hold new elections next month, most likely on June 10th or 17th.

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Economic turbulence has shrunk the market for business jets, and it’s causing an especially bumpy ride for Hawker Beechcraft.

The Wichita, Kan.-based aircraft maker filed for bankruptcy protection this week, seeking approval for a plan that would write an estimated $2.5 billion in debt off its books and eliminate almost $125 million in annual cash interest expenses.

Hawker Beechcraft Corp., which is owned by Onex Partners and GS Capital Partners, a Goldman Sachs private equity fund, has struggled with the sluggish business jet market more than other plane makers because it was purchased in a highly-leveraged deal at the peak of the general aviation market, just before the market tanked.

“It is one badly damaged firm, in a badly damaged market segment _ just a unique set of circumstances,” said Richard Aboulafia, an aviation analyst with Teal Group, a Fairfax, Va.-based aerospace and defense analysis company.

The economic downturn that began in late 2008 hit business jet makers especially hard, as corporate customers that were lining up for their own planes earlier in the decade began looking for ways to trim fat. The public outrage that Detroit auto executives took private jets to Washington seeking bailout money that November reinforced the planes’ image as a symbol of corporate excess. Two months later, the White House pressured Citigroup to cancel the planned delivery of a jet.

Wichita, the self-proclaimed “Air Capital of the World,” is the home of major manufacturing plants not only for Hawker Beechcraft but also for Boeing, Spirit AeroSystems, Cessna, Bombardier and more than a hundred smaller aircraft suppliers. But the business jet segment of industry has struggled as its sales sunk by 56 percent during a global economic downturn. Another blow for Wichita came earlier this year when Boeing announced it was closing its defense plant in Wichita.

“Frankly, given what Wichita has been through, this is unpleasant but relatively small,” Aboulafia said.

More than 13,000 aircraft workers here have lost their jobs since the 2008 start of the Great Recession, which pummeled sales of the small and mid-size business jets made by three of Wichita’s major manufacturing facilities.

“This is definitely another blow, another nail in this situation we have been going through and it is definitely not good news,” said Jeremy Hill, director for The Center for Economic Development and Business Research at Wichita State University.

Since its founding with the highly-leveraged 2007 purchase of Raytheon’s former aircraft unit, Raytheon Aircraft, Hawker Beechcraft has carried a heavy debt burden, reporting a total debt of $2.3 billion at the end of 2011, according to its annual statement to the Securities and Exchange Commission.

Hawker Beechcraft will likely emerge from bankruptcy keeping a majority of its business, although one or two of its product lines could be shut down, Aboulafia said.

“This is a company with good products and a good name,” he said. “They just happen to be carrying a lot of debt and they are going to have to make some tough choices about what they are going to do next.”

In 2009, Hawker delivered 98 business jets. Deliveries plummeted to 51 last year. It has stopped making its Hawker 400XP until demand improves, according to a filing last month.

Hawker Beechcraft sold $2.3 billion worth of business and general aviation planes in 2009. Last year those sales were almost $1 billion lower.

There’s little reason to buy a new jet right now. There are more than 4,000 used business planes on the market right now, said Gordon Blalock, vice president for sales at Omni International Jet Trading. “The market’s so depressed,” he said. “We’re seeing some of these airplanes selling for less than 50 percent of what they sold for brand new.” Several years ago, some planes actually appreciated in value because demand was so high, he said.

Cai von Rumohr, an analyst at Cowen and Co., said Hawker Beechcraft’s financial problems have made it harder to sell jets in the down market, because jet owners want to know that the company that built its plane will be around to service it and make parts.

“They have been losing share in the (business jet) market,” he said. “The crisis of confidence among their customers has been an issue.”

The company also makes trainers and other small planes for the military, but civilian planes are still 56 percent of its revenue, compared to 27 percent for military planes. Hawker has delivered more than 700 T-6 trainers, most of them to the U.S. Air Force and Navy. But that contract is winding down. Hawker is trying to sell a light attack version of that plane to the Air Force, which is reconsidering its initial pick of a competing plane.

For Wichita as well as Kansas, the stakes in the future of Hawker Beechcraft and the aviation industry are high.

Aircraft sales comprise the state’s number one export, accounting for a third of the products it makes, Hill said. In 2008, aerospace accounted for $4.3 billion of Kansas exports _ a number which plummeted to $2.1 billion by 2010. Kansas used to be the sixth largest city among U.S. aviation exporters in 2008, dropping to tenth by 2010.

Hawker Beechcraft employs some 7,400 people, with roughly 4,700 working at its Wichita facility. It also has factories in Little Rock, Ark., Britain and Mexico, as well as more than 100 service centers worldwide.

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If you thought having thousands of Twitter followers made you famous, how about showing up in a reality television series?

Bravo announced plans on Wednesday for two new shows focused on the tech realm.

The network is teaming with Facebook founder Mark Zuckerberg’s sister Randi Zuckerberg, who left Facebook in August to start her own media company, for a series with the working title of "Silicon Valley."

According to Bravo’s site, the show "captures the intertwining lives of young professionals on the path to becoming Silicon Valley’s next great success stories."

It’s too early to tell say whether Facebook founder Mark Zuckerberg will make a cameo. Perhaps instead of cat-fights, viewers will see code wars and hackathons. Bravo was mum on the details, and Zuckerberg — that’s Randi, not Mark — did not immediately respond to a request for comment.

Bravo also unveiled plans for a tech series with the working title called "Huh?," giving viewers an inside look at the crew behind ICanHasCheezburger.com. Run by entrepreneur Ben Huh, the Seattle-based Cheezburger, Inc. is known for LOLcats, FAIL blog, and its empire of Internet memes.

Bravo has frequently teamed up with buzzy tech startups, from Foursquare to TaskRabbit, to promote its shows, so a show tracking the young founders behind many of those startups isn’t a complete surprise.

Let’s just hope "Silicon Valley" doesn’t end up titled "Real Entrepreneurs of Silicon Valley."  

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Follow live updates from Marc Saltzman starting at 1 p.m. (EST) as he covers Apple

U.S. stocks recovered quite a bit of lost ground but still finished in the red Monday, following the path of world markets, after China lowered its annual growth target.

The Dow Jones industrial average () lost 15 points, or 0.1%, the S&P 500 () slipped 5 points, or 0.4%, and the Nasdaq composite () decreased 26 points, or 0.9%.

World markets fell Monday, after Chinese Premier Wen Jiabao set a lower target for China’s economic growth, underscoring the need to make the country’s breakneck development more sustainable.

The government is aiming for economic growth of 7.5% in 2012, Wen said — lower than the 2011 goal of about 8%. The Chinese economy often exceeds the official objective; last year it grew 9.2%.

"Even though China only lowered its target by half a percentage point, it’s a telegraph to the rest of the world that the second largest economy is slowing," said Tom Schrader, managing director at Stifel Nicolaus.

American manufacturers importing workers

China’s lower forecast also suggests that the country’s recent steps to ease monetary policy — in an effort to maintain strong economic growth while getting inflation under control — may not be working, said Schrader.

Aluminum-maker Alcoa (, Fortune 500) and Caterpillar (, Fortune 500), which makes construction equipment, were the biggest laggards in the Dow amid worries that slower growth in China could pressure demand for their products.

Trading could be choppy this week, leading up to a big news day on Friday. On the domestic front, investors will get the latest snapshot of the U.S. labor market, with the release of the February jobs report.

In Europe, Friday marks the deadline for private creditors to sign off on Greece’s debt write-down. Greece needs the debt deal to secure its €130 billion rescue package from the eurozone and avoid default.

Lehman Brothers to boost the market?

Stocks closed modestly lower last Friday, with the Dow snapping a two-week winning streak.

World markets: European stocks closed lower. Britain’s FTSE 100 () lost 0.6%, while the DAX () in Germany dropped 0.9% and France’s CAC 40 () shed 0.3%.

Asian markets ended lower. The Shanghai Composite () closed down 0.6%, while the Hang Seng () in Hong Kong lost 1 payday advances.4% and Japan’s Nikkei () dropped 0.8%.

Economy: The February ISM services index rose to 57.3, up from 56.8, which beat expectations.

Washington’s $5 trillion interest bill

Last week, the ISM manufacturing index for February slipped to 52.4, from 54.1 in January, indicating a slowdown in the sector’s expansion.

Meanwhile, factory orders in January decreased 1% — less than the 1.9% decline analysts were expecting. Factory orders rose 1.4% in December.

Companies: IBM (, Fortune 500) shares hit all-time high above $200 share. Citigroup (, Fortune 500) announced that it is exploring possible uses for Watson, IBM’s supercomputer that was famous for beating two human contestants on the game show "Jeopardy" last year.

Online reviews site Yelp () retreated, falling more than 14% after spiking 64% to top $24 a share in their debut on the New York Stock Exchange Friday.

AOL () became the latest advertiser to pull advertising from Rush Limbaugh’s radio show in response to his comments about a Georgetown law student who advocated healthcare coverage for contraception. AOL shares were flat Monday.

BP () shares were higher Monday, after the British oil giant and plaintiffs involved in the legal battle over the Gulf of Mexico oil spill said Friday they reached an agreement. BP estimated it would have to pay about $7.8 billion in the Deepwater Horizon disaster settlement.

Apple (, Fortune 500) said in a post on its website that the tech company has "created or supported" some 514,000 jobs in the United States, either through direct employment, the "App economy" or other means. Shares were down more than 2%, however, ahead of the company’s highly-anticipated iPad announcement Wednesday.

Currencies and commodities: The dollar lost ground against the British pound, the euro and the Japanese yen.

Take advantage of rising gas prices

Oil for April delivery rose 6 cents to settle at $106.75 a barrel.

Gold futures for April delivery fell $5.90 to settle at $1,703.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, with the yield rising to 2% from 1.99% late Friday. 

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Indonesia

A U.N. nuclear team arrived in Tehran early Sunday for a mission expected to focus on Iran’s alleged attempt to develop nuclear weapons.

The U.N. nuclear agency delegation includes two senior weapons experts _ Jacques Baute of France and Neville Whiting of South Africa _ suggesting that Iran may be prepared to address some issues related to the allegations.

The delegation from the International Atomic Energy Agency is led by Deputy Director General Herman Nackaerts, who is in charge of the Iran nuclear file. Also on the team is Rafael Grossi, IAEA chief Yukiya Amano’s right-hand man.

In unusually blunt comments ahead of his arrival in Tehran, Nackaerts urged Iran to work with his mission on probing the allegations about Iran’s alleged attempts to develop nuclear weapons, reflecting the importance the IAEA is attaching to the issue.

Tehran has refused to discuss the alleged weapons experiments for three years, saying they are based on “fabricated documents” provided by a “few arrogant countries” _ a phrase authorities in Iran often use to refer to the United States and its allies.

Ahead of his departure, Nackaerts told reporters at Vienna airport he hopes Iran “will engage with us on all concerns.”

“So we’re looking forward to the start of a dialogue,” he said: “A dialogue that is overdue since very long.”

In a sign of the difficulties the team faces and the tensions that surround Iran’s disputed nuclear program, a dozen Iranian hard-liners carrying photos of slain nuclear expert Mostafa Ahmadi Roshan were waiting at Tehran’s Imam Khomeini airport early Sunday to challenge the team upon arrival.

That prompted security officials to whisk the IAEA team away from the tarmac to avoid any confrontation with the hard-liners.

Iran’s official IRNA news agency confirmed the team’s arrival and said the IAEA experts are likely to visit the underground Fordo uranium enrichment site near the holy city of Qom, 80 miles (130 kilometers) south of the capital, Tehran.

During their three-day visit, the IAEA team will be looking for permission to talk to key Iranian scientists suspected of working on a weapons program, inspect documents related to such suspected work and secure commitments from Iranian authorities to allow future visits to sites linked to such allegations. But even a decision to enter a discussion over the allegations would be a major departure from Iran’s frequent simple refusal to talk about them.

The United States and its allies want Iran to halt its enrichment of uranium, which they worry could eventually lead to weapons-grade material and the production of nuclear weapons. Iran says its program is for peaceful purposes, such as generating electricity and producing medical radioisotopes to treat cancer patients.

Iran has accused the IAEA in the past of security leaks that expose its scientists and their families to the threat of assassination by the U.S. and Israel.

Iranian state media say Roshan, a chemistry expert and director of the Natanz uranium enrichment facility in central Iran, was interviewed by IAEA inspectors before being killed in a brazen bomb attack in Tehran earlier this month.

Iranian media have urged the government to be vigil, saying some IAEA inspectors are “spies,” reflecting the deep suspicion many in Iran have for the U.N. experts sent to inspect Iran’s nuclear sites.

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The editor of a British tabloid has outlined a culture where reporters exaggerate headlines, dramatize stories, and occasionally go too far.

Daily Star Editor Dawn Neesom was speaking at the judge-led inquiry into British media ethics set up in the wake of the phone hacking scandal centered on the now-defunct News of the World tabloid

She shied away from claims that her paper played fast and loose with the truth, but acknowledged that the paper’s mission was “to put a smile on people’s faces payday loans.”

Neesom said Thursday: “Occasionally, I admit, we do cross lines. But we do have standards.”

The Star is owned by media magnate Richard Desmond, who is also to give evidence at the inquiry.

Desmond also publishes the Daily Express and celebrity magazines OK! and New!

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The best week for the stock market in more than two years is ending with major indexes nearly unchanged.

A surprise drop in the U.S. unemployment rate sent stocks higher early Friday, but the gains fizzled throughout the afternoon. European stock indexes and the euro rose after German Chancellor Angela Merkel made a speech pushing for tighter rules on government spending.

The Dow Jones industrial average fell less than a point to close at 12,019 payday loans. The S&P 500 index also fell less than a point to 1,244. The Nasdaq rose under a point to 2,627.

More than three stocks rose for every one that fell on the New York Stock Exchange. Trading volume was below average at 4 billion.

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