Asian shipping lines under investigation
The European Commission has launched an antitrust investigation of the world’s largest shipping lines over possible price fixing, according to an article in the Wall Street Journal.
On May 17, European Commissioner investigators raided the offices of several major shipping companies in Denmark, France, Germany and Switzerland, conducting interviews and examining records. The commission’s suspicions were initially aroused, according to the article, when container shipping prices rose in 2009 as demand dropped and industry capacity expanded.
The index price for shipping a 40-ft. container was $1,603 in 2009. A year later, despite a slowdown in trade and a threefold increase in the number of container ships at sea, the price rose to $2,517.
Walmart posts $103.4 billion in first-quarter sales
Walmart reported first-quarter earnings that were above the company’s guidance, reflecting stability and strength in global operations, according to Mike Duke, president and CEO.
Walmart’s net income was $3.4 billion, compared with net income of $3.3 billion in the prior-year quarter.
Walmart reported net sales for the first quarter of $103.4 billion, an increase of 4.4% from $99.1 billion in the first quarter last year. Net sales for the quarter included a currency exchange rate benefit of $1.3 billion.
Achieving positive same-store sales remains a challenge at Walmart U.S., as this division reported a 1.1% decline due to a decline in traffic. Though this was within the company’s guidance range; Duke said there is room for improvement.
"We recognize we still have work to do. and comp-sales growth remains the greatest priority for me and the entire Walmart U.S. team. The good news is that the plan Bill Simon and his team are executing is gaining traction. We’re focused on delivering everyday low price and a wide assortment," Duke said.
The company said it expects U.S. same-store sales for the second quarter to range from down 1% to up 1%.
Walmart had more success with its Sam’s Club division, which reported that comparable sales, without fuel, increased 4.2% for the same period, which was 120 basis points above guidance. The company is expecting Sam’s Club’s comp sales, without fuel, for the second quarter to increase between 3% and 5%.
"Our second quarter is under way, and we expect our strong sales momentum to continue across grocery, home and apparel," said Brian Cornell, Sam’s Club president and CEO.
NAHB: Starts figure reflects low confidence in housing
As housing starts fell 10.6% in April to a seasonally adjusted annual rate of 523,000 units, the National Association of Home Builders said the numbers point to a lack of confidence in the housing market.
“While mortgage rates are low and house prices are as affordable as they’ve been in a generation, the decline in April’s housing starts is indicative of the low level of confidence that consumers have in the housing market,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.
Concerns regarding competition from foreclosures, a lack of consumer confidence in the housing market and the inability to secure production credit caused builders to slow production, the NAHB said.
“Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market,” said NAHB chief economist David Crowe. “The fundamentals — such as economic growth and employment — are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace. But until then, builders are unwilling to move forward. The issuance of housing permits, an indication of future housing activity, has remained at about the same level as the first quarter of the year.”
Single-family starts declined 5.1% to a seasonally adjusted annual rate of 394,000 units in April, while multi-family starts — which tend to display greater volatility on a month-to-month basis — dropped 24.1% to a rate of 129,000 units after rising 30.8% the month before.