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VOL. 6 | NO. 18 | Saturday, April 27, 2013

Daily Digest

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Higher Fares Help Southwest Airlines’ Profit

Higher fares helped Southwest Airlines make more money than Wall Street expected in the first quarter, but the company said Thursday that automatic federal spending cuts could hurt revenue in April.

The average passenger fare on Southwest is now more than $150 one-way, 4 percent higher than a year ago.

The airline also said that a new policy on no-shows will start next month.

Southwest’s first-quarter net income fell 40 percent to $59 million, or 8 cents per share. That’s down from earnings of $98 million, or 13 cents per share, a year ago.

Without gains from fuel-hedging contracts, Southwest would have earned 7 cents per share, topping analysts’ forecast of 2 cents per share.

Revenue totaled $4.08 billion, up 2 percent from a year ago. Analysts expected $4.07 billion, according to FactSet.

Southwest said that revenue was weaker than expected in March and so far in April. Automatic budget cuts that went into effect in March have caused federal agencies to cut back on travel. The company said that it’s “cautious” because of the potential effect of those cuts, but that recent bookings for May and June are “solid.”

At Southwest, lower fuel prices have offset the slump in revenue in April. Fuel is the airline’s biggest expense. It’s first-quarter fuel bill fell 3.5 percent compared with the same period last year, to $1.46 billion.

Southwest will officially enter the Memphis market later this year.

UWT Logistics to Expand Memphis Facilities

UWT Logistics said it will expand the company’s facilities on East Holmes Road in Memphis. The expansion represents a $4.8 million investment and will create 81 full-time jobs.

“Tennessee’s global transportation systems provide unsurpassed efficiency and proximity to customers throughout the U.S. and around the world,” said Tennessee Department of Economic and Community Development Commissioner Bill Hagerty, in a statement making the expansion official. “Companies like UWT Logistics understand the competitive edge that our solid infrastructure and pro-business environment offer.”

UWT Chief Financial Officer David Ozier says the company is focused on expanding its Memphis footprint by bringing new customers, offering more services and hiring the right people.

The transportation and logistics company currently employs about 160 people.

For more about UWT’s plans in Memphis, read the March 1 feature on the company in The Daily News.

Memphis in May Founder Receives Beale Street Note

The founder of the Memphis in May International Festival will get a brass note in the Beale Street Entertainment District just before the opening weekend of this year’s festival.

Lyman Aldrich started the festival in 1976 as a way to promote business ties between the city and other countries. The 1976 festival honored Japan as the city was courting the Japanese company Sharp Manufacturing to open a Memphis plant.

Aldrich gets his brass note in a ceremony May 2 at 5 p.m. at Rum Boogie Cafe.

Pop-Up Music Shop Coming Downtown

A unique pop-up shop is coming Downtown next month.

Oxford’s The End of All Music independent record store is setting up shop at Hoot-Louise May 15. The pop-up shop will feature treats from Muddy’s Bake Shop, Hoot-Louise’s unique brand of threads and accessories, plus new and used vinyl records from The End of All Music.

The End of All Music, which is based a few miles north of Oxford’s downtown square, will be peddling some record store swag plus some other exclusive items only available at the pop-up shop. It will last from noon to 7 p.m. May 15.

Visible Music College Hosts Band Showcase

For the first time, Visible Music College is opening to the public its twice-yearly music event “Turn it Up: Visible Bands Showcase,” which happens May 1 at the school’s 200 Madison Ave. campus.

The school hopes to make it a signature event going forward.

The concert is a culminating event for the student musicians who will take the stage and for the student songwriters, managers and marketers who’ve worked with them since the start of the fall semester.

There’s no cover charge, and the bands start at 7 p.m.

Unemployment Applications in US Drop to 339,000

The number of Americans seeking unemployment benefits fell last week to a seasonally adjusted 339,000, the second-fewest in more than five years. The drop suggests that layoffs have declined and that job growth may pick up from last month’s sluggish pace.

Applications for benefits dropped 16,000, the Labor Department said Thursday. The four-week average declined 4,500 to 357,500.

Applications are a proxy for layoffs. When they decline, it signals that companies are cutting fewer jobs.

Still, layoffs are only half the equation: Businesses also need to be confident enough in the economy to step up hiring. Many companies have been advertising more jobs but have been slow to fill them. Job openings jumped 11 percent during the 12 months that ended in February, but the number of people hired declined, according to a Labor Department report this month.

Forbes Gives High Marks to First Tennessee Unit

First Tennessee Advisory Services is ranked No. 8 on Forbes magazine’s list of the Top 50 Fastest Growing wealth management firms.

The entity, which is a business line of First Tennessee Bank, offers investment portfolios ranging from ultra-conservative to aggressive.

Forbes listed a growth in assets under management of $2.7 billion for First Tennessee Advisory Services and a total under management of $3.4 billion.

Indie Memphis Festival Worth Fee, Mag Says

MovieMaker magazine has included the Indie Memphis Film Festival on the magazine’s list of “Top 50 Film Festivals Worth the Entry Fee.”

MovieMaker has for more than 10 years compiled its annual guide for aspiring independent filmmakers. This year the magazine expanded its list from 25 to 50 festivals in “order to encompass a more diverse range of fest locations.”

Indie Memphis was previously included on the magazine’s “25 Film Festivals Worth the Entry Fee” in 2011 and as one of the “25 Coolest Film Festivals” in 2009.

The dates for this year’s festival will be Oct. 31 through Nov. 3 and will again be presented by Duncan-Williams Inc. Films will be shown at three venues in Midtown’s Overton Square area: Playhouse on the Square, The Circuit Playhouse, and on three screens at Malco Theatres’ Studio on the Square. Related events will be held at the Memphis Brooks Museum of Art.

Chamber Hosts Talk with Jack Sammons

The Greater Memphis Chamber is hosting a conversation with Jack Sammons, chairman of the Memphis-Shelby County Airport Authority, on May 3.

Sammons will discuss the Airport Authority’s plans and the future of the Memphis International Airport.

The event, held at the Hilton Memphis from 11:30 a.m. to 1 p.m., is open to prospective members and chamber members. Tickets are $35 for members and $40 for prospective members.

Delta Posts Small First-Quarter Profit

Delta Air Lines said government spending cuts and weak demand from vacationers are hurting revenue this month.

Lower fuel prices should help to offset the decline, the airline said on Tuesday.

Automatic government spending cuts that took effect last month have been cutting into air travel at some airlines. Delta said demand from last-minute travelers – a category that can include people flying on government business – began to fall in the last part of March, and that demand from leisure travelers is softer, too.

Delta said per-seat revenue will fall 2 percent to 3 percent this month.

The airline has been keeping a lid on flying, aiming to charge more for the seats that it does offer to passengers. During the first quarter, it cut flying capacity by 3 percent. It said capacity will be flat to up 1 percent in the second quarter.

The world’s second-biggest airline earned $7 million, or a penny per share, for the quarter that ended March 31. Not counting special items, it would have earned $85 million, or 10 cents per share – better than analysts had been expecting. The company reported net income of $124 million in the year-ago quarter, but excluding special items it lost $39 million, or 5 cents per share. Revenue rose 1 percent to $8.5 billion, matching analyst expectations. The first three months of the year are often money-losers for airlines. Delta says this was its best first-quarter operating profit in more than a decade.

Yield, which is one way to measure fares, rose 2.1 percent.

Delta’s oil refinery near Philadelphia lost $22 million because of ongoing supply disruptions from Superstorm Sandy and an outage in its gasoline production unit.

UTHSC Professor Receives $1.6 Million to Study Hepatitis C

Kui Li, an associate professor with The University of Tennessee Health Science Center, received two grants worth $1.6 million to study Hepatitis C and antiviral innate immunity.

Hepatitis C is a virus that infects more than 130 million worldwide. The RNA virus damages the liver slowly, causing chronic hepatitis in most people infected, putting patients at risk of cirrhosis and liver cancer. A patient’s natural immune response is the first line of host defense against invasive pathogens, like Hepatitis C. But it’s still not clear how a patient’s natural immune response defeats Hepatitis C and other RNA viruses.

Li’s research, funded by the National Institute of Allergy and Infectious Diseases, will study virus-host interactions that regulate pathogenesis of Hepatitis C and innate immune responses to RNA virus infections.

FedEx Lets Customers Pick Delivery Time for Fee

FedEx will let recipients leave detailed instructions for their driver or reschedule a delivery to their home.

FedEx Corp. said Tuesday it will charge $5 to reschedule the delivery day or location and $10 to request a 2-hour delivery window.

Other services are free, including putting a 14-day vacation hold on deliveries or making a request such as “Please leave the package at the back door.”

Raj Subramaniam, a marketing executive for the company, said FedEx Delivery Manager was inspired by the boom in online shopping.

Customers can sign up – that’s free – on the FedEx website to be notified of pending deliveries by email, text or phone without a tracking number or FedEx account.

Memphis’ MERI Earns Accreditation Renewal

The Medical Education and Research Institute, a nonprofit medical training facility in Memphis, said Tuesday it had received renewal of accreditation by the American Association of Tissue Banks.

The voluntary assessment helps ensure that the whole body donation program and anatomic services provided by the medical training facility are consistent with AATB standards, according to Elizabeth Ostric, MERI executive director.

MERI trains physicians, nurses, paramedics and other medical personnel from around the world. At MERI, health care professionals use unembalmed anatomical donors and human patient simulators to train and try new techniques, technologies and medical devices.

Regions Financial First-Quarter Income Climbs 76 Percent

Regions Financial Corp. said Tuesday its net income climbed in the first quarter as it set aside less money to cover losses on loans.

The big regional bank said its net income after dividends jumped 76 percent compared with a year ago. Regions Financial reported a much smaller provision for loan losses, and its results from last year also included a loss of $40 million from discontinued operations.

Regions Financial said its net income rose to $325 million, or 23 cents per share, from $185 million, or 11 cents per share. Revenue fell 4 percent, to $1.3 billion from $1.35 billion. Net interest income and noninterest income both fell 4 percent.

Analysts were forecasting net income of 20 cents per share and $1.33 billion in revenue, according to FactSet.

The company said its net interest income fell to $798 million. Net interest income combines interest on loans that the bank collects and interest on deposits and debt that the bank pays out. It is a measure of the bank’s ability to profit from its lending. Noninterest income, which comes from sources like fees, insurance and gains on securities, fell 4 percent to $501 million.

Regions Financials’ provision for loan losses decreased to $10 million from $117 million. Regions Financial has 1,700 offices and 2,000 ATMs in 16 states in the South, Midwest, and Texas.

Ubiquiti Networks Hires Its First Marketing Chief

The next-generation communications technology company led by Memphis Grizzlies owner Robert Pera has hired its first chief marketing officer.

David Hsieh will be responsible for leading Ubiquiti’s corporate marketing strategy and managing corporate communications. He has 25 years of technology industry marketing experience, most recently serving as vice president of marketing for video and emerging technologies at Cisco Systems Inc.

At Cisco he was responsible for marketing the company’s video portfolio to enterprises, service providers and growing emerging technology businesses across several market segments.

Delta Regional Authority: $1 Million for Grant Applications

The Delta Regional Authority is sweetening the pot for cross-state applications for federal grants to strengthen training partnerships between community colleges and employers.

Acting U.S. Labor Secretary Seth Harris said Friday that $474.5 million is available nationwide under the third round of the Trade Adjustment Assistance Community College and Career Training grants program.

The Delta Regional Authority is making up to $1 million available for applications from consortiums that cross state lines in its service area – Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri and Tennessee.

Officials want work-based training so students learn the skills employers need. They also want colleges to better track graduates’ employment and earnings.

US Home Sales Slip as Supply Remains Tight

Sales of previously occupied U.S. homes dipped in March as the supply remained tight. But the sales pace remained ahead of last year’s.

The National Association of Realtors said Monday that sales dipped to a seasonally adjusted annual rate of 4.92 million, from 4.95 million in February. February’s figure was revised lower.

Sales in March were 10.3 percent higher than a year earlier.

Sales have remained mostly unchanged in the past four months – largely, analysts say, because of a limited supply of homes. Economists still expect the housing market to continue recovering this year.

The low supply, combined with rising demand for housing, could accelerate construction in coming months. The Realtors’ group said buyer traffic is 25 percent higher than it was a year ago.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 307 5,073
MORTGAGES 101 483 6,709
FORECLOSURE NOTICES 0 55 1,534
BUILDING PERMITS 0 720 11,979
BANKRUPTCIES 77 334 5,293
BUSINESS LICENSES 36 125 2,061
UTILITY CONNECTIONS 0 443 6,907
MARRIAGE LICENSES 0 81 1,422

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