TIME General Electric

GE Profits Up 13% As Company Continues to Refocus

Workers assemble a General Electric Co. CF6-80C2 jet engine at the GE Aviation factory in Cincinnati, Ohio, June 25, 2014.
Workers assemble a General Electric Co. CF6-80C2 jet engine at the GE Aviation factory in Cincinnati, Ohio, June 25, 2014. Bloomberg/Getty Images

General Electric profits climbed 13% in the second quarter as the conglomerate refocuses on its core businesses of energy and heavy industry.

GE’s posted earnings of 35 cents a share ($3.55 billion) are up from 31 cents a share a year ago. Operating earnings climbed from 36 cents a share to 39 cents a share.

“GE had a good performance in the quarter and in the first half of 2014, with double-digit industrial segment profit growth, 30 basis points of margin expansion, and nearly $6 billion returned to shareholders,” said GE Chairman and CEO Jeff Immelt in a statement. “The environment continues to be generally positive.”

The news signals the success of GE’s strategy of shedding non-core businesses, like the media giant NBCUniversal, and doubling down on its energy and industrial portfolio. Last quarter, the French engineering titan Alstom agreed to sell its Power and Grid business that builds and services power plants and transmission grids.

TIME Economy

Global Markets Suffer After Ukraine Crash, Unrest Elsewhere

Traders work on the floor of the New York Stock Exchange
Traders work on the floor of the New York Stock Exchange July 17, 2014. U.S. stocks fell sharply lower on Thursday. © Brendan McDermid / Reuters—REUTERS

Stock markets report losses around the world as investors take fright at the broader geopolitical implications of the MH17 tragedy

Markets across the world took a conspicuous dive on Thursday in the wake of Malaysia Airlines Flight 17’s catastrophic crash in Ukraine — an event that came toward the end of a week marked by political unrest across Eastern Europe and the Middle East.

The Boeing 777 crashed in a rural area controlled by pro-Russian insurgency forces, believed by Ukrainian authorities to have shot down the plane, killing all 298 people on board.

As governments mobilized to make sense of the tragedy, which a spokesman for Ukrainian President Petro Poroshenko denounced as an unequivocal act of terrorism, equity and currency traders anxiously rushed to sell their shares, eyeing the crash as indicative of a broader geopolitical tumult that could threaten global economic stability.

“What happened with the plane today and things swirling around with what may have actually happened with the plane caused a bit of a sell-off,” J.J. Kinahan, chief strategist at TD Ameritrade, told the Associated Press. “The geopolitical risk is always the first one that people look for because it’s the one that changes the fastest. The market always hates uncertainty.”

Things had been economically rocky in Russia on Thursday morning even prior to the incident, with new sanctions against the country being imposed by the U.S. and E.U. — a response to Vladimir Putin’s support for the very rebels believed to have downed the Malaysia Airlines flight. That knocked the MICEX, Moscow’s primary stock exchange, down 2.9% by the day’s end. The ruble was down 1.1% against the dollar.

Things were relatively secure elsewhere until news of the crash broke around 10:30 a.m. E.T., shortly after markets opened on Wall Street. Emerging headlines on the tragedy, compounded with reports of Israel launching a ground offensive against Hamas forces in Gaza, jump-started the panic. The New York Stock Exchange had fallen by more than 127 points by the time it closed on Thursday evening; the S&P 500 reported its largest one-day percentage drop since April; prices of gold and oil had risen globally.

Friday has so far proved grim for stock markets in Asia, with both the Hang Seng in Hong Kong and the Nikkei 225 reporting notable slides by mid-afternoon.

In Kuala Lumpur, the price of Malaysia Airlines stock has been on the decline — not only in the aftermath of Thursday’s incident but for the past several months after the disappearance of Flight 370 in March, which has placed a significant financial burden on the company.

TIME Companies

Warren Buffett Loves His New Cadillac So Much He Wrote Mary Barra a Letter

The Oracle of Omaha loved the customer service as much as his new wheels.

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GM CEO Mary Barra has been getting hit hard on Capitol Hill, but she has one really big fan, at least.

Billionaire investment mogul Warren Buffett was so impressed with his new Cadillac that he sent the GM boss a letter praising the company.

Buffett sent his daughter to the Cadillac dealership in order to get a good price and was delighted with how she was treated. The car saleswoman, Madison Willers, impressed the Oracle of Omaha so much that Buffett asked that she personally deliver the car to him.

TIME Earnings

Google Growth Continues in Second Quarter

Google

Google continued to show large year-over-year revenue growth in its quarterly earnings report. The search giant generated nearly $16 billion in revenue for the quarter, a 22 percent increase over the same period last year that beat analyst expectations of $15.6 billion. The company posted a profit of $3.42 billion, up from $3.23 billion in the second quarter of 2013. Adjusted earnings per share were $6.08, off the mark from analyst estimates of $6.24.

The majority of Google’s revenue comes from people clicking ads on its search engine and on partner sites, and the trends there remained consistent with past quarters. The total number of paid clicks increased 25 percent year-over-year and 2 percent from the first quarter of 2014. The cost of these ads continues to fall though, decreasing 6 percent from the same period last year and staying stable from the first quarter of 2014.

Traffic acquisition costs, the money Google shares with companies who place its ads on their sites and the money Google pays to gets its search engine placed in web browsers, was $3.29 billion, up from $3.01 billion last year.

The company also announced that its chief business officer, Nikesh Arora, is leaving the company after nearly ten years to join the Japanese tech company SoftBank.

Google stock ticked up nearly two percent in after-hours trading.

TIME Coffee

Starbucks Unveils First Location in Colombia

Inside A Starbucks Store And The "Returning Moms" Program Ahead Of International Women's Day
Bloomberg/Getty Images

And will open 50 more within the next 5 years

Starbucks is spreading its corporate empire to a country already known for the strength of its coffee.

After 43 years of roasting and selling Colombian coffee, Starbucks opened its first store in Bogota, fully aware that it will have to compete with a number of domestic chains in a country with one of the world’s most vibrant coffee cultures. The new coffeehouse is bigger and more fancy than your typical Starbucks—the three-floored café has comfortable armchairs and elaborate wall art. The new branch will be the first anywhere to sell exclusively locally-sourced Starbucks coffee, the company said in a statement.

Starbucks “is looking to achieve a leadership position in the [Colombian] market,” said a statement by Nutresa, one of the two Latin American companies Starbucks is partnering with in the new venture.

The U.S. company’s main competitor will be Juan Valdez, a multinational chain that also sells 100% Colombian coffee. Juan Valdez seems to welcome the competition, though; Alejadra Londono, head of international sales, told the New York Daily News that “there’s room in the market for us both.”

Yet with Starbucks planning to open 50 stores in the market within the next five years, it remains to be seen whether Londono’s assured words will stick.

TIME energy

6 Simple Ways to Save on Your Energy Bill

Reduce your carbon footprint and keep more money in your pocket

+ READ ARTICLE

Unless you’re the Viking God and Marvel Comic character Thor, with the enviable ability to harness electricity—i.e. lightning—using your magic hammer, odds are you have to buy energy from other sources like power plants and gas stations.

Energy is a major expense for American families—about 22% of all energy consumed in the U.S. goes into running our households and all the modern conveniences we’ve come to rely upon, like our air conditioners, heaters, lights and computers.

Fortunately, there are easy ways to cut back on your energy usage, reducing your carbon footprint on the environment and your energy bill along with it. Here are six areas where cutting back on your energy usage is an easy way to put more money in your pocket.

TIME Autos

GM’s Mary Barra Faces Another Capitol Hill Mauling

General Motors CEO Mary Barra Testifies Before Senate Committee About GM's Recalls
CEO of the General Motors Company Mary Barra testifies during a hearing before the Consumer Protection, Product Safety, and Insurance Subcommittee of the Senate Commerce, Science and Transportation Committee on July 17, 2014 on Capitol Hill in Washington. Alex Wong—Getty Images

Barra is headed to the Senate for her fourth congressional hearing since record series of recalls began in February

Senators grilled GM’s general counsel Michael Millikin during a hearing Thursday after an internal investigation released last month found that his legal team knew of safety concerns linked to a faulty ignition switch for several years before recalls were announced in 2014.

“How in the world, in the aftermath of this report, did Michael Milliken keep his job?” asked Sen. Claire McCaskill, chair of the Subcommittee on consumer protection, product safety, and insurance, which held the hearing. “It is very clear that the culture of lawyering up and Whac-A-Mole to minimize liability in individual lawsuits killed innocent customers of general motors.”

“The failure of this legal department is stunning,” she said.

CEO Mary Barra, making her fourth hearing appearance on Capitol Hill since the company began massive recalls this year related to the ignition switch problem that has been linked to at least 13 deaths, was largely praised by Senators for her handling of the scandal, which erupted just weeks after she assumed the post.

Thursday’s hearing came in the wake of a New York Times report that found that GM withheld information from regulators inquiring about fatal accidents. Citing documents obtained through the Freedom of Information Act, the New York Times reported on Tuesday that GM “repeatedly found a way not to answer the simple question from regulators of what led to a crash.” In some cases, GM said it had not conducted an assessment and in others it simply declined to provide an answer. In another case, the company cited attorney-client privilege.

The hearing in Congress aimed to focus on accountability in corporate culture, as lawmakers aim to keep corporations from covering up safety concerns. Three senators introduced a bill on Wednesday that would impose criminal penalties for corporate executives who hide product dangers.

Milliken says he was not informed about the safety concerns until February of this year, and Barra defended her decision not to fire him. “He is a man of high integrity,” she said.

Following the internal investigation last month, GM fired 15 employees and Barra blamed “a pattern of management deficiencies and misjudgments.” But she said the probe found no deliberate cover-up by the company.

The Justice Department is separately investigating why it took the company more than a decade to address the problem.

Barra and Millikin were joined at the hearing by Anton Valukas, who headed up the internal report, and Rodney O’Neal, the head of the ignition switch supplier, Delphi. Kenneth Feinberg, who is administering GM’s compensation payments, also took questions from lawmakers about the compensation program.

TIME Companies

Microsoft to Cut Up to 18,000 Jobs

Microsoft CEO Satya Nadella gestures during the keynote address of the Build Conference in San Francisco, April 2, 2014
Microsoft CEO Satya Nadella gestures during the keynote address of the Build Conference in San Francisco, April 2, 2014 Eric Risberg—AP

Most of the cuts will come from Nokia, which it bought in April

Correction appended 11:o9am ET

Software giant Microsoft Corp will cut up to 18,000 jobs over the next year, it announced in a press statement Thursday.

The company said the cuts are part of “a restructuring plan to simplify [the] organization and align the recently acquired Nokia Devices and Services business with the company’s overall strategy.”

The bulk of the cuts, around 12,500 professional and factory positions, will come from the Nokia business, which Microsoft purchased for $7.2 billion in April. The acquisition brought Microsoft’s headcount to around 127,000 staff.

The cuts, which will be fully completed by June 30 next year, are the largest in Microsoft’s 39-year history. In 2009, former Microsoft CEO Steve Ballmer cut 5,800 jobs or 6 percent of staff to stem the effects of the recession.

The plans were announced in an email from Microsoft CEO Satya Nadella, who was appointed in February. This email follows Nadella announcing plans for a “leaner” business in an open note to employees last week.

Nadella’s cuts may be an attempt to make Microsoft more competitive against Google and Apple. Computer-maker Hewlett Packard has also announced job losses with plans to cut 50,000 of their 250,000 workforce over the next three to five years.

Correction: This article originally misstated how many staff joined Microsoft with the Nokia deal. It was around 32,000.

TIME Video Games

Microsoft Claims Xbox One Sales Doubled Since Price Cut

Microsoft

But since Microsoft won't release unit sales figures, we have no way of gauging what that claim actually means

The Xbox One’s price drop from $499 to $399 in early June is apparently paying dividends: Microsoft says in an Xbox Wire post that Xbox One sales have more than doubled since the company began selling a Kinect-less version of its flagship games console on June 9.

The “more than double” claim is based on undisclosed May sales, and Microsoft says its data stems from sold-through units, meaning purchases, not just units shipped to stores. The company adds that Xbox 360 growth is “solid” as well.

The update comes in advance of NPD’s June video game sales figures, due later today. The XBox One slashed prices earlier this summer to parity with Sony’s PlayStation 4, which also retails at $399.

Since NPD stopped providing unit sales breakdowns years ago, and Microsoft didn’t provide specific May figures, it’s impossible to gauge or even much guess at what “more than double” means. Microsoft could have sold a dozen Xbox Ones in May (making June’s take a whopping 24!), or it could have sold half a million. All we know for sure, taking Microsoft at its word, is that Xbox One sales are up.

The last these companies talked unit sales specifics (around the end of March), Sony said it had sold-through some 7 million PS4s *, Nintendo that it had sold-through just over 6 million Wii Us, with Microsoft bringing up the rear at around 5 million Xbox Ones shipped to stores.

* Edge apparently reported in early July that Sony had sold 9 million PS4s, but Sony has not confirmed.

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