“DALLAS (AP) — American Airlines is reaping higher fares and record revenue but still losing money.

AMR Corp. said Wednesday that it narrowed its second-quarter loss to $241 million mostly because of $230 million in costs tied to its bankruptcy restructuring. A year ago, it lost $286 million.

There are glimmers of hope for a turnaround at American.

Without restructuring costs and other special items, AMR would have earned $95 million, its first operating profit for the early-summer quarter since 2007. Revenue climbed 5.5 percent to $6.46 billion, a record for any quarter. And between American and regional affiliate American Eagle, planes averaged 85.1 percent full at the start of summer, also a company record.”

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“Bank of America swung to a profit from April through June and beat Wall Street expectations. It set aside the least money to cover bad loans since 2007, well before the financial crisis.

The bank said Wednesday that it made $2.1 billion in the second quarter, or 19 cents per share. Analysts polled by FactSet, a provider of financial data, had expected 16 cents.

Bank of America stock climbed 11 cents, or 1.4 percent, to $8.03 in premarket trading.

The bank set aside $1.8 billion in the quarter to cover bad loans, down 46 percent from a year earlier and a sign that the bank expects more customers to repay loans on time. It was the lowest figure since the first quarter of 2007.

Revenue was $22.2 billion, lower than analysts’ expectation of $22.8 billion. Revenue last year was $26.5 billion after excluding mortgage-related charges.”

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“(Reuters) – Bank of New York Mellon Corp said on Wednesday that second-quarter net income had fallen 37 percent on lower foreign exchange revenue and after it paid $212 million to settle aninvestor lawsuit.

The world’s largest custody bank reported net income of $466 million, or 39 cents a share, compared with $735 million, or 59 cents a share, a year earlier.

As announced earlier this month, the results included an after-tax charge of $212 million to settle an investor lawsuit accusing the bank of imprudently investing their cash in a risky debt vehicle that collapsed in 2008.

Quarterly revenue fell to $3.62 billion from $3.85 billion.”

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“(Reuters) – Honeywell International Inc posted an 11.7 percent rise in quarterly profit, topping Wall Street forecasts, as strong U.S. demand for building-control systems and specialty chemicals offset weakness in Europe.

The company on Wednesday also raised the low end of its full-year profit forecast by 5 cents, and now anticipates 2012 earnings of $4.40 to $4.55 per share, representing growth of 9 percent to 12 percent.”

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“BHP Billiton Ltd. (BHP)’s fourth-quarter iron ore production gained 15 percent as the world’s largest mining company expands operations in Australia’s Pilbara region, setting a 12th consecutive annual record.

Output was 40.9 million metric tons in the three months ended June 30, from 35.5 million tons a year earlier, Melbourne- based BHP said today in a statement. That beat the 37.3 million ton median estimate of five analysts surveyed by Bloomberg.

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“European stocks advanced for the third time in four days after lenders including Credit Suisse Group AG (CSGN) reported profits that beat estimates, while minutes showed the Bank of England may reconsider the case for an interest-rate cut.

Credit Suisse, the second-biggest Swiss bank, jumped 4.6 percent after announcing a higher cost cutting-target and boosting capital. Bankia SA (BKIA) surged 10 percent after Economy Minister Luis de Guindos said Spain will block banks selling preferred stocks to retail investors. Ericsson AB, the biggest maker of mobile network equipment, slid 2.9 percent after missing estimates for second-quarter profit.”

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USA! USA!

ABT, AXP, BAC, DAL, EBAY, HON, IBM, QCOM, USB, YUM,

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Look into their guidance to get a handle on the future of the economy.

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“The public pension and retirement ‘schemes’ are in considerable trouble (as we noted here and here) and now, according to a recent S&P study,private companies are at record levels of pension under-funding. Fiscal 2011 shows that the under-funded level for S&P 500 companies’ defined pensions reached an epic $354.7 billion – an increase of over $100 billion from 2010 and surpassing the 2008 record of $308.4 billion – and OPEB under-funding reached $223.4 billion.”

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Company guided lower both quarterly and on the full year range.

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New York, July 12, 2012 — Nearly three-quarters of senior tranches of the tobacco settlement bonds will default should cigarette consumption in the US continue on its current rate of annual decline, says Moody’s Investors Service in a new report. Specifically, the rating agency finds that if the decline in consumption continues at a 3% – 4% pace, as Moody’s projects, bonds constituting 74% of the aggregate outstanding balance of all the tobacco settlement bonds will default.

The finding is consistent with current ratings on the tobacco settlement bonds, 79% of which are rated at B1 or below, says Moody’s in the new report “Sustained Decline in Cigarette Consumption Rates Will Cause Many Tobacco Settlement Bonds to Default.”

“Characteristics that lead bonds to be vulnerable to a lower rate of decline include high leverage, long bond maturity, and low cash reserves,” says Irina Faynzilberg, a Moody’s Vice President-Senior Credit Officer and Manager.

In the report Moody’s presents consumption break-even decline rates for the bonds, which estimate the rate of decline that would lead a particular bond to default.

Moody’s finds that 15 tranches representing 33% of the rated bond balance have an annual consumption decline break-even in the 2%-3% range, while 27 tranches representing 41% of the aggregate rated outstanding balance for all tobacco bonds, have an annual consumption decline break-even in the 3% – 4% range. The analysis assumes a constant rate of decline for the duration of the bonds’ life.

Moody’s calculates the break-evens for cigarette consumption decline rates by conducting iterative cash flow analyses to determine the default threshold for each rated bond, holding all other inputs constant. The default threshold is the highest constant annual decline rate for cigarette consumption at which each bond fully amortizes by its final maturity date without a payment default.

Moody’s notes that although it does not assign ratings based on consumption breakevens, they do closely correlate with ratings.

Read here:

“Revenue in a number of Citi’s I-banking businesses plunge 40% and the possibility of layoffs is growing.”

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$GS was not a bank, then became a bank for bailout funds, then stopped being a bank for fear of Dodd Frank regulation, and is now building an in house bank to loan to wealthy clients.

I’ll take this as a sign that interest rates will move higher soon and that lending will become immensely profitable shortly.

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After a drop in earnings $GS will seek to cut the fat in order to boost profits going forward.

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“WASHINGTON (Reuters) – A “pervasively polluted” culture atHSBC Holdings Plc allowed the bank to act as financier to clients seeking to route shadowy funds from the world’s most dangerous and secretive corners, including Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.”

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“SAN FRANCISCO (Reuters) – Google Inc’s Marissa Mayer will become Yahoo Inc’s new chief executive from Tuesday, a surprise pick for its third CEO in a year.

Mayer’s hiring, which edged out front-runner and acting CEO Ross Levinsohn, signaled the Internet company is likely to renew its focus on Web technology and products rather than beefing up online content.”

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“(Reuters) – Johnson & Johnson (JNJ) reported lower-than-expected quarterly sales on Tuesday and cut its full-year 2012 profit forecast, citing negative foreign-exchange factors, but quarterly earnings narrowly beat Wall Street estimates.

The diversified healthcare company said on Tuesday it earned $1.41 billion, or 50 cents per share, in the second quarter. That compared with $2.78 billion, or $1.00 per share, in the year-earlier period, when the company took a big charge for restructuring its Cordis heart-device unit.

Quarterly sales totaled $16.48 billion, falling short of Wall Street expectations of $16.69 billion.”

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“NEW YORK (AP) — The Coca-Cola Co. says its net income slipped in the second quarter from a year ago, as rising commodity costs offset its expansion overseas.

The world’s biggest beverage maker — which makes Minute Maid, Powerade and Dasani — says its revenue growth was powered by emerging markets such as India. But that growth was offset by higher costs for ingredients and slower growth at home.

For the three months ended June 29, the company said it earned $2.79 billion, or $1.21 per share. That’s down from $2.8 billion, or $1.20 per share, in the year-ago period.”

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