FedEx: cost plan can counter sluggish growth

NEW YORK (AP) — FedEx is more pessimistic about the U.S. economy than it was three months ago, but more assured of its own ability to grow earnings.
The world's second-largest package delivery company lowered its economic forecast for the U.S., saying that there remains a lot of uncertainty for the company and the country.
Its forecast for the current quarter, which incorporates the critical holiday season, falls short of Wall Street expectations.
But FedEx maintained its forecast for the full fiscal year ending in May, counting on a massive cost reduction plan and a slightly more optimistic view of growth overseas. Shares rose 2.6 percent in afternoon trading.
FedEx Corp. posted earnings of $438 million, or $1.39 per share for the quarter that ending in November, compared with $497 million, or $1.57 per share, a year ago. That was below the $1.41 per share that Wall Street was expecting, according to a poll of analysts by FactSet.
Revenue rose to $11.1 billion from $10.6 billion previously, as the company scaled back its operation to better match demand and some of its raised rates. Analysts forecast revenue of $10.84 billion.
Growth in the company's freight and ground operations boosted results, but FedEx reported "persistent weakness" in its core express network. Operating income in that segment fell 33 percent. FedEx and its larger rival UPS Inc. have both seen consumers and businesses opt for slower shipping options to cut costs.
FedEx said on Wednesday that it expects earnings will be between $1.25 and $1.45 per share in the third quarter. Analysts that follow the company were predicting per-share earnings of $1.45.
The company, based in Memphis, Tenn., also said it expects to earn between $6.20 and $6.60 per share for the year ending in May, excluding any charges from the company's buyout plan. Wall Street is looking for $6.34.
Earlier this month FedEx said it will offer some employees up to two years pay to leave, starting next year. The voluntary program is part of an effort to cut annual costs by $1.7 billion within three years. The plan also includes cutting aircraft and underused assets.

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Participant Media plans cable TV network targeting millenials

LOS ANGELES (Reuters) - Entertainment company Participant Media, one of the backers of the hit historical drama "Lincoln", will launch a cable TV network next summer with programming that focuses on social issues of interest to the millenials generation of teens and young adults.

The channel's original programming, films and documentaries will be aimed at viewers age 18 to 34 in the large demographic group known as millenials, Participant Media CEO Jim Berk said in an interview on Monday.

Millenials are particularly interested in the type of content that Participant produces about social issues, Berk said. The studio's credits include the current release "Lincoln", about President Abraham Lincoln's push to ban slavery, last year's civil rights drama "The Help" and Al Gore climate change documentary "An Inconvenient Truth".

Participant Media is creating the new network by purchasing two existing cable channels, The Documentary Channel and Halogen TV. After those networks are combined and rebranded, the new channel will reach an estimated 40 million of the more than 100 million U.S. pay-TV subscribers.

The company, founded by billionaire and former eBay Inc President Jeff Skoll with the aim of producing entertaining content that inspires social change, interacts regularly with more than 2.5 million people through social media, local movie screenings and its Takepart.com website, Berk said.

The challenge for Participant will be to sign up additional pay-TV distributors and win viewership in a crowded media landscape. The company is privately held and is not part of a large media conglomerate.

"We have the funding necessary to take a very long-term view, and to spend what we need to spend in terms of programming," Berk said.

The mainstay of the network's lineup will be original programming from a variety of genres, said Evan Shapiro, a Participant executive who will run the new network.

The company is developing programming with established Hollywood names including former MTV President Brian Graden, "Inconvenient Truth" director Davis Guggenheim and documentary filmmaker Morgan Spurlock.

Participant also hopes to work with pay-TV distributors to make the channel's content available on mobile devices such as smartphones and tablets, to meet the viewing patterns of younger audiences, Shapiro said.

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Participant Media starts cable network for millenials

NEW YORK (TheWrap.com) - Participant Media, the company behind films including "Lincoln" and "The Help," is starting a new cable network targeting millenial viewers, with content from Davis Guggenheim and The Jim Henson Company, among others.

It will be led by Evan Shapiro, who joined Participant in May after serving as President of IFC and Sundance Channel.

Participant has bought The Documentary Channel and entered into an agreement to acquire the distribution assets of Halogen TV from The Inspiration Networks. No terms were disclosed.

The combined and rebranded properties are expected to reach more than 40 million subscribers once the yet-to-be-named network launches in the summer.

"The goal of Participant is to tell stories that serve as catalysts for social change. With our television channel, we can bring those stories into the homes of our viewers every day," said Participant chairman and founder Jeff Skoll.

Those producing content for the new network also include producer Brian Graden, The Jim Henson Company's Brian Henson, columnist and blogger Meghan McCain, Morgan Spurlock, Gotham Chopra, filmmaker Mary Harron, writer/director Timothy Scott Bogart, and Cineflix Media, a TV producer and distributor in which Participant Media controls an equity interest.

Guggenheim directed the Oscar winning documentary "An Inconvenient Truth" for Participant.

"Our content will be specifically designed for the viewers that the pay TV eco-system is most at risk of losing," said Shapiro. "We all know that Millennials are changing how media is consumed. However, they also have the strong desire and inimitable capacity to help change the world. Our research shows that there is a whitespace in the television landscape and we believe that a destination for ‘the next greatest generation' will be a win for our affiliate partners, advertisers and the creative community."

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Amazon adds episodes of alt-comedy show "UnCabaret"

LOS ANGELES (TheWrap.com) - Amazon Instant Video has added four exclusive episodes of "UnCabaret," an alt-comedy showcase for the likes of Margaret Cho and Andy Dick, to its Prime Instant Video service.

The show was created and hosted by comedian and entertainer Beth Lapides and features performances by such comedy stars as Sandra Bernhard, Garfunkle and Oates, Greg Fitzsimmons and Rob Delaney. Instead of punch-line driven sets, performers are encouraged to show off story-based stream-of-consciousness acts.

Amazon Prime members will get free access to the titles. The episodes will be available for rental or purchase for Amazon Instant Video customers on an a la carte basis.

Amazon Prime costs $79 annually and gives members free two-day shipping as well as streaming access to movies and shows from the likes of Paramount and Disney-ABC. The catalog of titles grew a little larger Monday. In addition to "UnCabaret," Amazon announced an exclusive content licensing agreement with Turner Broadcasting System and Warner Bros. TV to add two TNT shows, "Falling Skies" and "The Closer" to its service.

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Family Guy," "Haven" episodes pulled due to Newtown shootings rescheduled

LOS ANGELES (TheWrap.com) - In a possible sign that the nation - or at least network programmers are beginning to regain their composure after Friday's horrific school shootings in Newtown, Conn., episodes of Fox's "Family Guy" and Syfy's "Haven" have been rescheduled.

The "Family Guy" episode "Jesus, Mary and Joseph," which was initially scheduled to run on Sunday before being pulled from the schedule following the massacre, will now air this upcoming Sunday.

While the episode isn't particularly violent, the holiday parody episode does poke fun at religion - something that might not have sat well in the days following the killings.

An episode of "American Dad" that also was pulled last Sunday has not yet been rescheduled.

The "Reunion" episode of Syfy's "Haven," which was due to air Friday night - the same day of the shootings - will now run on January 17, along with the show's season finale. That episode features fictional gun violence.

In addition to the "Family Guy" and "Haven" postponements, the TLC special "Best Funeral Ever" had its December 26 premiere date pushed back to January, while a recent episode of the ABC drama "Scandal," which depicted the killing of a family of four, was removed from the network's website Monday.

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Leah Remini sued by former managers over "Family Tools" commissions

LOS ANGELES (TheWrap.com) - Leah Remini's new TV gig is already giving her a headache, months before it even starts. Former "King of Queens" star Remini is being sued by her former managers, the Collective Management Group, which claims that it's owed $67,000 in commissions relating to her upcoming ABC comedy "Family Tools," which debuts May 1.

In a complaint filed with Los Angeles Superior Court on Tuesday, the Collective says that it entered into an agreement with the actress in November 2011 that guaranteed the company 10 percent of the earnings that emerged from projects that Remini "discussed, negotiated, contemplated, or procured/booked during Plaintiff's representation of Remini," regardless of whether the income was earned after she and the Collective parted ways.

According to the lawsuit, that would include the $1 million that it says Remini will earn for the first season of "Family Tools." (The suit allows that it isn't owed commission on a $330,000 talent holding fee that Remini received from ABC prior to officially being booked on the show.)

Remini, pictured above wearing the self-satisfied smirk of someone who just might stiff her former managers out of their commission, terminated her agreement with the Collective "without warning or justification" in October, the suit says.

Alleging breach of oral contract among other charges, the suit is asking for an order stipulating that it's owed the $67,000, plus unspecified damages, interest and court costs.

Remini's agent has not yet responded to TheWrap's request for comment.

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Maintenance deals drive Micro Focus earnings beat

LONDON (Reuters) - Information technology company Micro Focus International  posted better-than-expected first-half core earnings after it moved towards more lucrative maintenance contracts, with fewer low-margin consultancy deals.

The British mainframe software specialist posted a 3 percent rise in adjusted core earnings of $92.2 million on Thursday, ahead of analysts' average forecasts of about $86 million.

Revenue at the business, which works on the large computers that crunch data for banks and retailers, slipped 5 percent to $207.3 million, broadly as expected by the market.

Executive Chairman Kevin Loosemore said it was a "solid" performance against a backdrop of weak demand in markets like Spain, Italy and Japan.

"We are cautious about the macro stuff, but not to the point where we think it will cause any great downturn," he said in an interview.

He said revenue in the second half would likely be similar to the first.

The target for the core earnings margin, however, was increased to 40-45 percent, from a previous range of 37-42 percent, reflecting the changed product mix.

Loosemore has repositioned the business to drive cash returns for shareholders rather than chasing high revenue growth.

A total $313.9 million was returned to shareholders in the previous 12 months, he said, and the board intended to return more cash in November next year and in 2014.

It also increased its interim dividend by 45 percent to 11.9 cents.

Shares in the group, which have risen by 29 percent in the last six months, were flat at 570.5 pence at 1010 GMT.

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Rona says looking to sell non-core assets

(Reuters) - Canadian home-improvement retailer Rona Inc , the target of a C$1.8 billion takeover proposal by U.S.-based Lowe's Cos Inc  earlier this year, said it expects to dispose of non-core assets and redeploy capital to leverage core assets.

The company wants to improve its retail EBITDA (earnings before interest, tax, depreciation and amortization) margin in line with industry standards under the leadership of acting Chief Executive Dominique Boies, who joined Rona in 2011, the company said in a statement.

Lowe's withdrew its unsolicited offer buy Montreal-based Rona in mid-September in the face of stiff opposition from Quebec province politicians and many of the company's independent dealers.

Rona's longtime chief executive, Robert Dutton, stepped down last month following disappointing results, prompting speculation that the company could be back in play.

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Exclusive: U.S. likely to extend Iran sanction waivers-sources

WASHINGTON (Reuters) - The United States is likely to exempt India, South Korea, Turkey and others from Iranian financial sanctions for another six months on Friday as a reward for reducing crude purchases from the Islamic republic, two U.S. government sources said.

Oil shipments by Iran have more than halved in 2012 in the face of U.S. and European Union sanctions aimed at cutting Tehran's foreign exchange earnings and funding for a nuclear program they suspect is designed for a military purpose. Iran denies that the program is for nuclear weapons.

The U.S. sanctions, which target financial transactions, have gradually tightened the noose on Iran's crude sales. But exports took a deep hit in July when EU sanctions kicked in, largely because they effectively, overnight, banned insurance cover on ships carrying Iranian crude.

The sanctions have sharply curtailed the market for Iranian crude, with Asian buyers and Turkey the only customers this month, according to shipping sources. EU sanctions included a ban on members from buying Iranian crude.
The International Energy Agency (IEA) estimates that Iranian oil exports dipped below 1 million barrels per day (bpd) over the summer as Western sanctions on Tehran tightened.

According to official Iranian government data available through the Joint Oil Data Initiative (JODI), Iran exported an average of just over 2 million bpd in 2011.

On June 11, a number of countries received their first round of reprieves from U.S. sanctions that President Barack Obama signed into law a year ago. The waivers are issued by the State Department.

Under the law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases are reduced.

The architects of U.S. sanctions legislation, Democratic Senator Robert Menendez and Republican Senator Mark Kirk, have urged the White House to require oil importers to reduce purchases by 18 percent or more to qualify for further exemptions.

U.S. waivers for China, the top consumer of Iran's oil, and Singapore are due to expire on December 25, 180 days after they were issued. Both countries are expected to get waiver extensions because they have reduced oil purchases from Iran. Those waivers could also be issued on Friday, one of the government sources and an oil industry source said.

"There's nothing in the sanctions law that says the U.S. has to wait a full 180 days to announce exceptions for China," said the government source, who asked not to be named because of the sensitive nature of the matter.
Japan and 10 EU countries received six-month sanction reprieves from the United States in September.
SANCTIONS HIT
The West suspects that Iran's nuclear program is enriching uranium to levels that could be used in weapons. Tehran has said that the program is for the generation of electricity and medical purposes.
David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, said this week the mix of sanctions was costing Iran up to $5 billion a month.

The United States and the EU say the sanctions are targeted at the government and not ordinary citizens, although the rial has dropped sharply in value and forced up food prices so that Iranians can not always afford even basic items.

Still, the West has been ramping up sanctions further as worries mount about Tehran's nuclear intentions and to try to calm concerns in Israel, which has threatened to attack Iranian nuclear installations if a peaceful solution is not found.
Shipping sources say Iran's crude exports are set to drop by about a quarter in December from November and to the lowest level since the sanctions were imposed this year, representing a loss of about $800 million at current prices.
EU sanctions mean that major buyers China, South Korea and India ask Iran to ship the oil to them because they are unable to secure insurance cover for vessels.
Delivery has often been delayed because the Iranian fleet is severely stretched, with an increasing number of its tankers being used as floating storage for unsold oil.
The sanction will leave Asia's 2012 Iranian crude imports at just over 1 million bpd, down roughly a quarter from a year ago, Reuters calculations show.

As Iran's biggest buyers of Iran crude, Asian countries lobbied hard for exemptions to the sanctions for fear that a loss of the crude would force prices higher and undermine economic growth. Many Asian refiners are also designed to handle Iranian crude, and would require costly reconfiguring if they were to give up the grade substantially.

China, the world's second-largest oil consumer, has also repeatedly voiced its opposition to unilateral sanctions, such as those imposed by the United States. It says measures should be multilateral and agreed through the United Nations.

Still, China's imports have fallen in recent months as Iranian tankers struggled to ship even the reduced volumes requested by importing countries. Earlier this year, China slashed imports by as much as half as the country wrangled over annual contract terms with Tehran.

China's imports from Iran are down 22 percent on the year to 426,000 bpd in January-October, the months for which official data is available.

South Korea has reduced purchases 39 percent to 148,000 bpd and Japan 41 percent to 188,000 bpd over the same period. In contrast, India has raised imports to 328,000 bpd, up 7 percent.

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Aetna reaches $120 million settlement over reimbursements

(Reuters) - Aetna Inc , the third-largest U.S. health insurer, has agreed to pay as much as $120 million to settle nationwide litigation over how it reimburses members for out-of-network medical services.

The accord calls for Aetna to pay $60 million into a general settlement fund, plus as much as $60 million more, depending on how many people submit claims.

Aetna said it will take a $78 million after-tax charge in the current quarter for the settlement, and that the charge will not affect operating earnings. It expects to pay for the settlement over the next one to two years.

Patients and doctors accused Aetna of using databases provided by Ingenix Inc, a unit of UnitedHealth Group Inc , to systematically underpay claims involving services and supplies from out-of-network providers.

The Hartford, Connecticut-based insurer was also challenged over how it calculated out-of-network reimbursement rates, and over its disclosures about those calculations.

"It continues to be a problem that insurers use improper bases to pay low reimbursement rates," said Joe Whatley, a lawyer for the out-of-network providers, in a phone interview. "We hope this settlement will deter similar conduct."

In a joint court filing on Friday, the plaintiffs and Aetna said the accord was "adequate, fair and reasonable."

It would cover patients who used out-of-network providers from March 1, 2001, to the present, and cover out-of-network providers from June 3, 2003, to the present. The litigation began in July 2007.

"We are pleased that we were able to reach a favorable agreement," James Cecchi, lead lawyer for the plaintiffs, said in a phone interview.

The settlement requires approval by U.S. District Judge Stanley Chesler in Newark, New Jersey. Aetna said it expects approval in the middle of 2013, and that it may void the settlement if too many people decide not to participate.

On January 13, 2009, UnitedHealth and Aetna agreed to stop using the Ingenix database and to help fund a new independent database to calculate rates, under agreements with then-New York attorney general, Andrew Cuomo, who is now the state's governor.

Two days later, UnitedHealth agreed to pay $350 million to settle lawsuits over its out-of-network reimbursements.

In early afternoon trading, Aetna shares were up 1.9 percent at $44.24 on the New York Stock Exchange.

The case is In re: Aetna UCR Litigation, U.S. District Court, District of New Jersey, Nos. MDL-2020 and 07-03541.

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