Finance topics

Editor’s note: Each day, we will share several items from the People on the Move section we publish each Friday in our print edition. The full list is available only to Triangle Business Journal subscribers. If you are not a subscriber but would like earlier access to the People on the Move section, you can subscribe here.

Architecture, Engineering & Design

• BBH Design hired Katherine Truncellito as a designer.

Banking/Finance

• Fifth Third Bank named John Schiappa, Russ Fallis, Rob Weaver and Jason Douglas commercial relationship managers on the bank’s middle market banking team in Raleigh guaranteed payday loan.

• First Citizens Bank named Denton Lee business segment manager. He is responsible for overseeing business and treasury services, leasing, working capital finance, First Citizens Insurance Services and the bank’s international division.

• AXA Advisors LLC hired Will Humphrey and Dan Paradise as financial professionals in its Raleigh office.

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It’s a pretty good time to be Microsoft — but the company still has a lot to prove.

Chief Executive Steve Ballmer and the full roster of Microsoft’s top executives are meeting with financial analysts on Thursday to map out Microsoft’s strategy for maintaining its leadership in the corporate market and catching up to Apple and Google in the consumer space.

Analysts will be especially tuned in for what Microsoft says about its plans for tablets, Windows Phone 7, Bing and Kinect — businesses that all lag behind their rivals.

The company is coming off of one of its strongest quarters ever in terms of revenue and profit, as Windows 7 and Office sales have soared on renewed demand for PCs. Microsoft has sold nearly 200 million Windows 7 licenses, demonstrating an ability to bounce back from the Windows Vista debacle. Many corporate clients, which make up about three-quarters of Microsoft’s customer base, are beginning to refresh their computers and software, and most are expected to migrate to Windows 7 and Office 2010 by the end of next year.

The software giant has also embraced cloud computing in a way that impresses industry analysts. Microsoft (MSFT, Fortune 500) responded to Google Apps’ threat to Office by launching a very functional, free online edition of Office 2010 in June. Microsoft’s unique "Azure" cloud platform helps businesses save money by moving existing applications built on Microsoft’s platform — as many corporate applications are — onto remote servers that are supported and serviced by Microsoft, allowing for remote access to data.

For consumers, on the other hand, Microsoft is struggling to keep pace with its competitors.

With search engine Bing, Microsoft has integrated some innovative and compelling ideas to make search more visual, intuitive and predictive of users’ intent — Google (GOOG, Fortune 500) has even copied many of Bing’s most unique features. Bing has grown its share of the search market by about 50% in a little over a year, and the revenue-sharing deal with Yahoo (YHOO, Fortune 500) may help it gain scale.

But Bing still trails Google by a vast margin, and it continues to hemorrhage cash.

And then there’s Windows Phone 7, one of Microsoft’s biggest question marks.

With its last software release, Windows Mobile 6.5, Microsoft did fairly well in terms of global smartphone market share, but the company was is badly in the United States to more feature-rich phones like the iPhone, Research In Motion’s (RIMM) BlackBerry and Android-based devices.

Windows Phone 7 is a complete redesign of Microsoft’s mobile offering, focusing on a simple and unique user interface. But it’s not slated to debut until this fall — an eon in the fast-moving phone field, where the iPhone and Android continue to gobble up market share.

Tablets are also a glaring question that Microsoft will need to address on Thursday.

With the early success of Apple’s (AAPL, Fortune 500) iPad, many analysts are predicting that the tablet space will be one of the fastest-growing tech segments this decade, alongside smartphones. But Ballmer has only vaguely articulated a very generalized strategy for tablet computers, namely that Windows 7 will be on tablets "soon." But the CEO famously canned a turmoil-fraught Microsoft tablet project that had been in the works almost a decade before the iPad came to market. Analysts want more concrete answers about how Microsoft plans to compete in tablets.

Xbox is perhaps Microsoft’s greatest source of strength with consumers, outside of Windows.

With the much-hyped, controllerless Kinect accessory set to go on sale this fall, Microsoft hopes to grow its user base even more by adding on the casual gamers who have embraced Nintendo’s Wii. Microsoft loves to sell Xbox’s ability to download media and stream it across a PC, Zune or Windows Phone. The consumer cloud is a high-growth space that many tech companies are quick to embrace, but given its lack of success so far with Zune media players and Windows Phone, Microsoft has to be concerned about what happens if/when Apple allows its users to stream their iTunes libraries across multiple devices over the Internet.

Microsoft’s consumer divisions, which include mobile, have failed to consistently make money for the company. The company let entertainment division chief Robbie Bach head out the door in May.

Here’s a telling sign of how challenging Microsoft is finding that market: Though it has many questions to answer on the consumer front, Don Mattrick, who replaced Bach, is not scheduled to speak on Thursday. 

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The Orlando City Council received an $8.4 million federal grant that will allow it to retain 46 firefighter positions that would have been eliminated as part of budget cuts due to the recession.

The funding is part of the federal government’s Staffing for Adequate Fire and Emergency Response program. The grant will cover the firefighters’ salaries and benefits for a two-year period with no matching funds required.

“Securing this grant took a collaborative, bipartisan effort from Central Florida’s elected leaders,” said Orlando Mayor Buddy Dyer Faxless payday loans. “I want to specifically thank U.S. Sen. Bill Nelson, U.S. Sen. George S. LeMieux, U.S Rep. Corrine Brown, U.S. Rep. Alan Grayson and U.S. Rep. Suzanne M. Kosmas for their willingness to partner with us to obtain this critical funding.”

The SAFER grant is expected to be distributed to the city of Orlando later this year.

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General Electric reported quarterly earnings that rose from a year earlier and said its finance arm, GE Capital, continues to show signs of stabilization.

The Fairfield, Conn.-based company said net income jumped 16% to $3.1 billion. Earnings from continuing operations rose 14% to $3.3 billion, pushing earnings per share to 30 cents. Analysts polled by Thomson Reuters had forecast a profit of 27 cents per share for the quarter.

Sales fell 4% to $37.4 billion in the quarter, missing the $38.4 billion in revenue expected by analysts.

"GE’s economic environment continues to improve," said GE Chief Executive Jeffrey Immelt in a statement, adding that the company is "on track for solid earnings growth."

The company said "losses have peaked" at its closely watched GE Capital division, which accounts for more than a third of overall revenue. The lending unit saw sales slip 3% to $12.3 billion, but profit surged 93% from a year earlier to $830 million.

The commercial real estate business remained "the one tough area in GE Capital," losing another $524 million in the second quarter, which GE said was in line with expectations.

But based on the unit’s overall recovery in the quarter, GE Capital won’t need contributions from the industrial side of the business, the Immelt said druing a post-earnings call with investors.

NBC Universal’s revenue rose 5% to $3.75 billion, while profit jumped 13% to $607 million in the quarter. At its home and business division, sales climbed 4% to $2.25 billion as profit rose 59% to $143 million.

Orders on the rise: The company cited growth in orders as another bright spot in the quarter, with total orders up 8% to $19.2 billion, boosted by improved demand for oil and gas, and health care equipment. Equipment orders jumped 17%, with a 20% increase in orders at the energy infrastructure division and a 14% rise in technology infrastructure orders.

The company saw its first growth in commercial orders since the third quarter of 2008, and GE expects there will be single-digit orders growth in the second half of the year, Immelt said.

Dividend hike on the way: GE reiterated its expectations to grow earnings and dividends "in 2011 and beyond." In February of 2009, the company cut its dividend by 68% to 10 cents per share, and investors have been looking for clues about when it will be raised.

Immelt said on the conference call that GE expects to pay a "normal" dividend of 45% of earnings in 2012 but he didn’t give a specifc per-share figure.

"We’re trying to be thoughtful about it and cautious about it," he said. "We do believe we’ll have the capital flexibility in the years to come."

Cash on hand: The company continued to build up its cash reserves, putting aside another $74 billion during the quarter.

"The cash story and the balance sheet shrinking story is a very positive story for GE and our investors," said Immelt.

By the end of the year, GE expects to have $25 billion in cash at the parent level. But on the company’s earnings call, UBS analyst Jason Feldman asked how much of a "backstop" GE really needs.

"Clearly we are going to have more cash in the future than we did in the crisis," Immelt answered. "We are going to have the flexibility to do what we want with the company."

GE brought in $3.8 billion in cash from industrial operations and said it is on track to generate $13 billion to $15 billion this year. But at the same time, industrial sales fell 6% to $24.4 billion in the quarter.

Shares of GE (GE, Fortune 500) slid 3.3% after the market open. The stock had jumped 3.5% immediately after the company released its results.  

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The Arizona Diamondbacks are hoping Edwin Jackson’s no-hitter Friday will boost merchandise and jersey sales.

Jackson threw the second no-hitter in D-backs history against the Tampa Bay Rays even though it took him 149 pitches, a highlight in an otherwise disappointing season thus far for the D-backs. This is Jackson’s first year with the Diamondbacks. He was with the Detroit Tigers last year and the Rays in 2008.

“We have ordered a number T-shirts through Majestic with his name and No lowest fee payday loans. 36 on the back,” said said team spokeswoman Tina Manzo. “MLB.com has also been promoting customized authentic jerseys with Jackson’s name and number on dbacks.com. It’s been too soon to realize the demand but we will have merchandise available when the team returns from the road for a 10-game home stand starting on Friday against the Dodgers.”

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The net worth of American households inched higher during the first three months of 2010, rising at about twice the pace as the previous quarter, the Federal Reserve said Thursday.

Household net worth, the difference between assets and liabilities, rose to $54.6 trillion in the first quarter of 2010, up about 2% from $53.5 trillion in the fourth quarter. That’s the fastest rate of increase since the second quarter of 2009, and faster than the 1% climb in the previous quarter, the final three months of last year payday loans for bad credit.

Although the figure marked the fourth consecutive quarterly rise, it remained well below the highs seen in 2007. Net worth peaked at about $65.9 trillion in the second quarter of that year.

The rebound in household net worth came in part on the back of the rising value of investment portfolios. During the first quarter, stock market holdings rose 4% to $7.9 trillion.  

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Businesses, including those in Dayton, need better access to the Chinese market, one of the largest in the world.

That was the message from John Manzella, president of Manzella Trade Communications Inc., who was the keynote lunch speaker Thursday at the Miami Valley International Trade Association’s World Trade Day.

Trade between the United States and China is changing, he said. It started with American businesses buying direct from China, then went to American businesses producing in China and selling products globally. Now, the current state of trade has businesses producing in China to sell to China’s domestic market, Manzella said.

“We have access, but we want to have continuing, unwavering access,” Manzella said.

Manzella Trade Communications is a communication and public affairs firm in New York. The meeting also included other presentations on the theme of doing business with China.

Manzella’s point was about the essential relationship between these two countries. China is the U.S.’ fastest growing and third largest export market, he said. Top trading partners of the U.S. are Canada and Mexico.

The lunch talk featured several points, according to Manzella.

• China is setting its own agenda and doing what it sees as right for its country; and

• China has shown confidence coming out of the Great Recession and needs the U.S. less. However, both countries are mutually dependent. China needs access to U.S. and world markets, the U.S. needs China to help finance its debt and both need to cooperate on political issues such as North Korea and Iran relations, terrorism and climate change.

“If we view China as the enemy, every issue that comes up will default to fear,” Manzella said.

The message needs to be taken to heart politically and economically, said C. Don Niece, a consultant in import and export regulations for compLight LLC of Tipp City. The importance of doing business with China depends on the industry and not a company’s size, he said.

“Its got to be one of the most important markets,” said Niece, who was at the Trade Association’s lunch.

Manzella is the author of “Grasping Globalization: Its Impact and Your Corporate Response.”

The Miami Valley International Trade Association is a nonprofit organization for networking in overseas development and has 80 company members.

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Industrial Alliance Insurance and Financial Services Inc. of Canada has launched a company in Scottsdale in what officials say “is the next phase of the company’s long-term growth strategy in the U.S.”

IA American Life Insurance Co. will be headquartered with the Quebec City company’s Industrial Alliance Pacific Life Insurance Co. U.S. division. The two will offer a range of life and annuity products.

Among IA’s first efforts was a tentative agreement to take on policies of Golden State Mutual Life Insurance Co., seized in September by California regulators. It’s also offering a new product called SecureLife Plus universal life insurance, which offers coverage to individuals up to age 120 and features such as increased maximums on term riders, a new waiver of surrender charge and an accelerated death benefit.

“We’ve laid a solid U.S. foundation and now we’re focusing on growth in underserved, middle-income markets,” said Michael Stickney, president of IA American.

“The debut of IA American marks the beginning of a new phase in our expansion in North America,” said Yvon Charest, president and CEO of Industrial Alliance guaranteed online payday loans. “Over the last few years, we’ve focused on creating a solid local management team in the U.S. Our next objective is to create a strong and vibrant organization capable of serving the insurance and financial needs of middle-income American families.”

State officials took over Golden State Mutual, the largest minority-owned life insurance company in California, after the insurer’s surplus dropped below the state’s required minimum. Golden State Mutual had posted six consecutive years of net operating losses and was operating in a hazardous financial condition, according to an announcement from Insurance Commissioner Steve Poizner. IA was the only bidder that met state requirements after a national search.

Founded in 1892, Industrial Alliance is a life and health insurance company with operations across North America. It has more than 3,400 employees and manages and over $58 billion in assets. Officials could not be reached over the weekend for further details on the Scottsdale operation.

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Five former U.S. Treasury secretaries who have served both Republican and Democrat presidents have jointly called on Congress to implement the so- called Volcker Rule to limit the size and trading of banks.

Banks that benefit from public support via access to the Federal Reserve and the Federal Deposit Insurance Corp. shouldn’t “engage in essentially speculative activity unrelated to essential bank services,” John Snow, Paul O’Neill, Nicholas Brady, George Shultz and W. Michael Blumenthal wrote in a letter published by the Wall Street Journal.

Restricting proprietary trading by banks is a “key element in protecting our financial system and will assure that banks will give priority to their essential lending and depository responsibilities,” the former secretaries wrote.

The group also urged the U.S. government to take the lead at international meetings to win “broad agreement on this principle among the leading financial centers.”

U.S. President Barack Obama on Jan. 21 introduced a proposal he called the Volcker Rule to limit the size and trading activities of financial institutions and reduce risk- taking. The rule is named after former Fed Chairman Paul Volcker.

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John Zumwalt said he plans to give up the chief executive officer’s role at The PBSJ Corp.

Zumwalt, who also is chairman of the engineering and consulting firm, said in a Jan. 25 letter to shareholders that the company expects a new CEO to be in place by the end of September. Zumwalt said he would continue to serve as CEO until his replacement is found.

Korn/Ferry, an executive search firm, will perform both an internal and external search for candidates under the oversight of the nominating committee of the company’s board, Zumwalt said in his letter, which was first reported by the nonprofit news organization, Broward Bulldog.

PBSJ, an employee-owned firm headquartered in Tampa, has been under scrutiny following a series of what Zumwalt described in his letter as “management crisis,” including a $36 million embezzlement scheme and accusations of violating federal campaign finance laws. Most recently, the company said early results of an internal probe suggested that violations of the Foreign Corrupt Practices Act might have occurred in connection with certain projects undertaken by its PBS&J International Inc. subsidiary.

Zumwalt, who served as president of the international subsidiary until July, said he would focus his attention in the coming months on the strategy growth of the corporation and the strengthening and expansion of its core North American businesses.

Bob Paulsen, vice chairman, will provide day-to-day oversight of the current businesses at the corporate level, as it moves ahead with a streamlined business organization, the letter said.

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