Merrill Sells Intl Wealth Business to Baer, Google Cuts Motorola Staff

Arthi Gupta
13 Aug, 2012
New York City

Google plans to slash 20% workforce and shutter one third of offices at Motorola Mobility. BP agreed to sell Texas midstream gas assets for $227.5 million. Bank of America to sell its international wealth management businesses to Julius Baer.

[R]11:00 AM New York – Google plans to slash 20% workforce and shutter one third of offices at Motorola Mobility. BP agreed to sell Texas midstream gas assets for $227.5 million. Bank of America to sell its international wealth management businesses to Julius Baer.[/R]

U.S. indexes opened lower and focused on international events after economic growth in Japan slowed sharply in the second quarter.

Investors are scheduled to review the release of retail sales, weekly jobless claims, producer and consumer price inflation, consumer sentiment and housing starts in the week.

Bank of America Corporation agreed to sell its international wealth management businesses based outside of the U.S. and Japan to Julius Baer Group, the Swiss private banking group.

European indexes pared losses after trading sideways in early morning trading on weak economic data from Japan and debt auctions from Germany and Italy.

Germany sold €3.770 billion of its 6-month Bubill at negative yields.

The average yield on the debt due February 2013 was -0.0499% compared to an average yield of -0.0344% at the previous sale on July 9. The bid-to-cover ratio declined to 1.30 from 1.70.

Italy sold €8 billion of 12-month debt at an average yield of 2.767% compared to an average yield of 2.697% at the prior auction on July 12. The bid-to-cover ratio rose to 1.69 from 1.55 last month.

Asian stocks edged lower after Japan reported weak second quarter economic growth.

Japan''s gross domestic product rose 0.3% in the second quarter following the 1.6% gain in the first quarter, the nation’s Cabinet Office said.

Annually, Japan’s gross domestic product rose 1.4% in the second quarter compared with 5.5% in the prior quarter.

Google to Cut Jobs in Motorola Mobility

Google plans to cut 20% of its workforce and also shutter nearly one third of its worldwide offices at its struggling Motorola Mobility, the cell phone maker it acquired only three months ago.

Google will reduce headcount by around 4,000 from 20,000 employees with two-thirds of the reduction planned outside the U.S.

Motorola said it will trim its operations in Asia and India and consolidate its research operations to Chicago, Beijing and Silicon Valley.

Motorola plans to trim most of the middle management, exit low margin businesses and also make fewer versions of mobile phones.

In addition, Motorola plans to close or consolidate about one-third of its 90 facilities, as well as simplify its mobile products portfolio.

BP to Sell Texas Midstream Gas Assets

BP America Production Company agreed to sell its Sunray and Hemphill gas processing plants in Texas, together with their associated gas gathering system, to Eagle Rock Energy Partners for $227.5 million in cash. The transaction is expected to close in the fourth quarter.

Julius Baer to Acquire Merrill’s Wealth Management Business

Julius Baer agreed to acquire Merrill Lynch’s International Wealth Management business based outside the U.S. for Sfr860 million.

Julius Baer’s existing assets under management would increase by 40% to Sfr251 billion assuming Sfr72 billion assets under management is transferred.

Earnings Review

Petrofac Limited, the integrated facilities services provider reported first-half revenues rose 19.6% to $3.24 billion. Net profit attributable to the company shareholders increased 32.1% to $325.3 million from $246.3 million the prior year.

SYSCO Corporation ((SYY)), the food products distributor said fourth quarter sales increased 5.9% to $11.04 billion. Net earnings for the quarter decreased 8% to $309 million or 53 cents per diluted share compared with $336.31 million or 57 cents per share in the prior year.

For fiscal 2012, sales increased 7.8% to $42.4 billion from $39.3 billion in fiscal 2011. Net earnings decreased 2.6% to $1.1 billion. Diluted earnings per share in the fiscal year decreased 3.1% to $1.90 from $1.96 in 2011.