Orders jump for key US long-lasting factory goods

WASHINGTON — Orders for U.S. factory goods that signal business investment plans jumped last month by the most in more than a year, suggesting companies are confident about their business prospects.

The Commerce Department said Wednesday that orders for so-called core capital goods, which include industrial machinery, construction equipment and computers, rose 6.3 percent in January from December. A sharp fall in demand for commercial aircraft caused overall durable goods orders to drop 5.2 percent, the first decline since August.

Orders for commercial aircraft are volatile from month to month and can cause large swings in the overall figure. Boeing reported orders for only two planes in January, down from 183 in December. Orders for defense equipment also plummeted by the most in more than 12 years.

Durable goods are items expected to last at least three years.

The increase in core capital goods suggests companies are willing to expand their production capacities despite worries that automatic government spending cuts will slow the economy in the coming months.

"The fact remains that capital spending appears to be holding up very well," Dan Greenhaus, chief global strategist at BTIG, a brokerage firm. "In fact, it appears to be accelerating."

Still, the jump in orders wasn't broad-based and occurred mostly in machinery and manufactured metal products. Orders for computers and communications equipment both fell and orders for autos and auto parts were unchanged.

And even with the increase, orders have mostly just recovered last year's losses. Total core capital goods orders reached $67.7 billion in January, just above December 2011's level.

Several economists warned that orders were likely to fall in the coming months after such a big gain.

"We don't expect businesses suddenly to throw caution to the wind," Paul Ashworth, an economist at Capital Economics, said in a note to clients.

About $85 billion in spending cuts are scheduled to kick in Friday and there is little sign that the White House and Congress will reach a deal to avoid them. Defense Department officials may have slowed purchases in January in anticipation of the cutbacks.

Business investment plans have held up in recent months despite the uncertainty surrounding tax and spending policies. Core capital goods orders dipped 0.3 percent in December but posted strong gains of 3.3 percent in November and 3 percent in October.

The report suggests U.S. manufacturing is strengthening. The Institute for Supply Management said earlier this month that factory activity grew in January at the fastest pace in nine months. Measures of new orders and hiring both rose.

But industrial production fell in January after two months of increases, the Federal Reserve said. Much of the decline reflected a big drop in auto production that was likely temporary. The auto industry is coming off its best year for sales in five years. Sales continue to rise, so production will likely rebound in February.

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Aveo Oncology eyes FDA drug review

Aveo Oncology of Cambridge and Astellas Pharma Global Development Inc. said today a U.S. Food and Drug Administration advisory committee will review the company's advanced renal cell carcinoma treatment.

The review of tivozanib will take place on May 2. The FDA's Oncologic Drugs Advisory Committee reviews and evaluates data concerning the safety and effectiveness of marketed and investigational human drug products for use in the treatment of cancer, and makes recommendations to the commissioner of food and drugs.

The review of Aveo's new drug application for tivozanib is expected to be complete by July 28, officials said. Aveo's partner is a U.S. subsidiary of Tokyo-based Astellas Pharma Inc.

Tivozanib is an oral, once-daily, investigational tyrosine kinase inhibitor for which positive results from a third clinical study in advanced renal cell carcinoma have been reported, the company said, adding the drug is being evaluated in other tumors.

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Former N.H. governor joins tech firm’s board

Former N.H. governor joins tech firm's board

Ping4 Inc., a Nashua, N.H.-based maker of hyperlocal mobile emergency alerts, said today that former New Hampshire Gov. John Lynch has joined the company's board of directors, effectively immediately.

Ping4 is the creator of ping4alerts! for smartphones and tablets, which can notify populations about approaching tornadoes, hurricanes, crimes in progress, missing persons, and chemical, biological, radioactive, nuclear and explosives warnings.

"Governor Lynch's leadership and executive talents are exceptional," said company CEO Jim Bender. "He understands corporate governance, and his honesty and integrity are unquestioned. He also has first hand experience with emergency management. We are fortunate to have him join us."

"The company is poised for both domestic and international expansion and, through public private partnerships, will help keep citizens safe and informed across the globe," added Lynch in a statement. "The future of disaster management is in getting life saving information into the hands of the public in real-time."

Lynch was first elected governor of New Hampshire in 2004 and was re-elected to three additional terms. He did not seek a fifth term last year.

During his business career, Lynch served as director of admissions at Harvard Business School and president of the Lynch Group, a business consulting firm in Manchester, N.H. Lynch also previously served as CEO of Knoll Inc., a national furniture manufacturer.

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Life is Good giving part of profits to kids foundation

Hub-based retailer Life is Good said today it will now donate 10 percent of its net profits to help kids in need through the Life is Good Kids Foundation.

"To date, we have helped raise $9.5 million to help kids in need, but we're just getting started. With this 10 percent donation announcement we are making an ongoing, long-term commitment," said Bert Jacobs, chief executive optimist of Life is good, in a statement.

The company's co-founders said they currently donate all proceeds from their speaking engagements to foundation.

In October the company announced a partnership with Hallmark Cards to extend the brand's message.

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State: Health clubs not meeting membership price display law

A month-long investigation of 15 health clubs around the Boston-area revealed that all failed to display membership prices and fees as mandated by state law, the state Office of Consumer Affairs and Business Regulation said today.

The survey was conducted from December through January, the time when many health clubs are offering special deals. Investigators used information from company websites, phone inquiries, and in-person visits, the agency said.

"This is the busiest season for new health club memberships, with people trying to stick to their New Year's resolutions," said Undersecretary Barbara Anthony. "We want to make sure that, as with any other product or service you buy, consumers are aware of their rights and told the price and terms and conditions before signing any contracts. Our survey shows that health club consumers, through no fault of their own, may not know how much they'll be paying."

The survey found that in addition to failing to post membership prices, none of the locations surveyed adequately displayed a consumer's three-day right to cancel health club contracts.

In several instances when investigators asked for this information, they were provided with an incomplete list of prices on a sheet of paper, or were only told the information verbally, the agency said.

The survey also found that in addition to monthly or annual dues, additional fees were charged at some of the clubs, including enrollment, rate lock guarantee, and termination fees.

Anthony said her office will refer all alleged violations to the attorney general's office.

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After meatballs, Ikea withdraws sausages

STOCKHOLM — After withdrawing meatballs from stores across Europe, home furnishings company Ikea said Wednesday its own tests confirmed "a few indications of horse meat" and that it would also remove wiener sausages made by the same supplier.

Ikea said it would withdraw the sausages from stores in France, Britain, Spain, Ireland and Portugal. Other stores were getting sausages from other suppliers, company spokeswoman Ylva Magnusson said.

No horse meat had been found in the wieners, which are made of ground pork and beef, but they were removed anyway because they came from the same supplier as the meatballs, Magnusson said.

The supplier, Gunnar Dafgard AB, didn't return calls seeking comment.

The move comes two days after Czech food inspectors found traces of horse meat in Ikea's Swedish-made meatballs, prompting the company to pull them from store shelves in 21 European countries and in Hong Kong, Thailand and the Dominican Republic.

Stores in other countries, including the U.S. and Canada, were not affected because they received meatballs from a different supplier.

Ikea said results from its own tests confirmed some meatballs didn't just contain beef and pork, despite what their labeling said.

"Based on some hundred test results that we have received so far, there are a few indications of horse meat," Magnusson said. "Together with the Swedish supplier in question we have decided to withdraw from sales also the wiener sausages ... from that supplier."

Horse meat has recently been found mixed into beef dishes sold across Europe, including in frozen supermarket meals. It has also been found in meals served at restaurants, schools and hospitals. Authorities say the scandal is a case of fraudulent labeling but does not pose a health risk.

The French wholesaler at the epicenter of the scandal, Spanghero, announced Wednesday that it had filed for bankruptcy protection. The company denies that it intentionally mislabeled and sold horse meat as beef, but the French government has said it should have known and temporarily forced it to shut down all production. It has slowly started to package meats again, but is not selling any to other manufacturers.

The company, which employs about 300 people, said it hoped the court filing would save its business and those jobs.

Meanwhile, food safety authorities across Europe continued to clamp down on mislabeled meat.

Latvia's food safety agency said that traces of horse meat were found in products labeled as beef by a local meatpacker, Forevers.

The agency said 416 horses were slaughtered last year in Latvia, out of which 203 were eventually delivered to Forevers from the same Latvia-based slaughterhouse, Aibi. All the horse meat was labeled as beef in the invoices, the agency said. It wasn't immediately clear if any of the meat was exported.

Also Wednesday, Russia's state sanitary watchdog said it detected horse meat in sausages imported from Austria. The agency's spokesman, Alexei Alexeyenko, said in a statement carried by the ITAR-Tass news agency that the sausages were stated to only contain beef.

Portuguese authorities said late Tuesday they had seized 79 metric tons (87 U.S. tons) of beef products containing traces of horse meat in recent days and opened criminal proceedings against five local companies. Portugal's Food Safety Agency said it made the seizures at companies that process, package and distribute meat to large retail outlets.

The agency said in a statement on its website that it also took almost 19,000 pre-packed products from Portuguese stores after detecting horse meat in them. They included lasagnas, hamburgers and meatballs.

___

Associated Press writers Barry Hatton in Lisbon, Sarah DiLorenzo in Paris, Gary Peach in Riga, Latvia; and Vladimir Isachenkov in Moscow contributed to this report.

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Doris Kearns Goodwin to speak at Boston Chamber gala

Pulitzer Prize-winning author and presidential historian Doris Kearns Goodwin will deliver the keynote address at the Greater Boston Chamber of Commerce's annual meeting on May 8 at the Boston Convention and Exhibition Center.

Goodwin's work includes "Lyndon Johnson & The American Dream," "The Fitzgeralds and the Kennedys," and "No Ordinary Time: Franklin and Eleanor Roosevelt: The American Home Front During World War II."

Her most recent book, "Team of Rivals: The Political Genius of Abraham Lincoln," was the basis of Steven Spielberg's Academy Award-winning film "Lincoln."

Goodwin is currently at work on a new book about the "progressive era," focused on Theodore Roosevelt, William Taft and the golden age of journalism.

The chamber's annual meeting brings together more than 1,600 business, government and philanthropic leaders.

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Airbus parent EADS sees Q4 earnings halve

BERLIN — Airbus parent company EADS NV posted a 47 percent drop in fourth-quarter net profit Wednesday after taking costly charges at its helicopter and defense electronics divisions.

The aerospace giant recorded a €325 million ($425 million) net profit in the October-December period, down from the previous year's €612 million. But for the full year, its net earnings were up 19 percent at €1.23 billion from €1.03 billion in 2011.

"There's still some way to go to meet our profitability targets," said chief executive Tom Enders.

Revenues rose 17 percent during the fourth quarter to €19.22 billion, with the core Airbus division posting a 21 percent increase to almost €13 billion.

Investors welcomed the figures, pushing EADS shares up 6.7 percent to €37.20 on the NYSE Euronext exchange in Paris.

EADS took a €198 million hit during the quarter at its defense electronics contractor Cassidian, in part reflecting restructuring costs. Renegotiating contracts with government customers resulted in a €100 million charge at helicopter maker Eurocopter.

But the company's core business, aircraft maker Airbus, posted a 36 percent increase in operating profit during the final three months, to €393 million from €289 million in 2011. Of that, orders for civilian aircraft brought in €309 million while military planes garnered €85 million during the quarter.

Spaceflight division Astrium reported operating profits of €121 million, an increase of 19 percent from the same period the previous year.

EADS said it expects to sell more commercial aircraft — about 700 — in 2013. Revenues will grow modestly, it said, but results will be affected by stuttering sales of the giant A380, which has suffered problems with its wings.

"We would love to sell more of the big birds," said Enders. "We need to sell more, and we will."

Another headache for Airbus are the production delays for its new A350 Extra Wide Body model — intended to challenge Boeing's 787 "Dreamliner." The 787 program has itself run into difficulties with the entire fleet grounded due to problems with its lithium batteries. Enders was diplomatic about his rival's woes, saying there was "definitely no schadenfreude" about the 787's grounding.

In its earnings report EADS repeated its warning that the A350 XWB program "remains challenging."

"Any schedule change could lead to increasingly higher impact on provisions," the company said.

EADS also said it was pushing back delivery of the first A400 M military transport planes from the first to the second quarter of the year.

With defense spending being cut in many industrialized countries, Enders said EADS was satisfied with the current share of defense in its business.

"Maybe it's not a bad time to have a smaller rather than larger defense business," he told reporters in Berlin, adding that the company planned to look forward after its failed bid to merge with Britain's BAE Systems last year.

Investors had also expected to receive an update Wednesday on the company's internal probe into allegations of bribery in the sale of fighter jets to Austria.

Enders said the results of the investigation — which runs parallel to a probe by Austrian authorities — would be presented at a later date as its scope had been widened.

"It's too early to jump to any conclusions," he said. But the company isn't currently making any provisions for legal repercussions in the case. "I have no reason to assume that employees of the company have engaged in misconduct or any criminal behavior."

The company said it is inviting shareholders to an extraordinary meeting March 27 to approve its new governance structure and a share buyback program for up to 15 percent of its stock. EADS last year announced sweeping governance changes that will see influence by state shareholders France and Germany shrink.

The company board is proposing a €0.60 increase in dividend at its annual general meeting in June.

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House chairman opposes universal background checks

WASHINGTON — The Republican chairman of the House Judiciary Committee said Wednesday he opposes universal background checks on gun sales and doesn't foresee such a measure being part of gun legislation in the House.

Requiring background checks on all gun sales is a top priority of the Obama administration in the wake of the Newtown, Conn., school shooting, and has appeared to be emerging in the Senate as a possible area of bipartisan consensus.

But Rep. Bob Goodlatte of Virginia said at a Christian Science Monitor breakfast with media that such a requirement could unnecessarily inconvenience law-abiding citizens and lead to the creation of a national gun registry — something Goodlatte and many other Republicans oppose.

"It's not a very practical thing to do and you'll have a lot of inconvenience to law-abiding citizens at the same time you're not going to keep many weapons out of the hands of people who are misusing them," Goodlatte said. "I think there are better ways."

Instead, Goodlatte said he supports strengthening the existing background check system for gun buyers and cracking down on illegal firearms sales.

President Barack Obama proposed near-universal background checks after the December shooting of 20 children and six adults in Connecticut. Currently, the checks are only required for purchases from federally licensed gun dealers, not sales between private individuals at gun shows, online or elsewhere.

Obama also has supported limiting the size of ammunition magazines and renewing a ban on assault weapons, issues that were being examined at a Senate hearing Wednesday. But both those measures are seen as tough to get through Congress and Goodlatte has said he opposes both.

Expanding background checks has been seen as more politically doable, but Goodlatte's comments suggest tough prospects for that idea, too.

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Hostess sale of Wonder bread nears completion

NEW YORK — Wonder bread is one step closer to getting a new owner.

A person familiar with the situation says a bid by Flowers Foods to buy several bread brands from Hostess was met with no competing offers. The individual requested anonymity because the auction process is private.

The $360 million bid by Flowers also includes Nature's Pride, Butternut, Home Pride and Merita breads. An auction will still be held Thursday for a separate $30 million bid by Flowers for Beefsteak. The source said a competing offer for that brand was submitted by Mexico's Grupo Bimbo, which makes Thomas' English muffins and Entenmann's cakes.

Any sales would be subject to approval by a bankruptcy court on March 19.

Flowers Foods, based in Thomasville, Ga., makes Tastykakes and breads including Nature's Own and Cobblestone Mill. Hostess has also picked "stalking horse bidder" for its snack cakes, which include Twinkies, Ding Dongs and Ho Hos. The deadline to submit competing offers for those brands isn't until mid-March.

Taken together, Hostess has said its six bread brands generated just under $1 billion in sales last year, with Wonder bread accounting for about half of that. Flower Foods, which generates about $3 billion in annual sales, said it expects the deals to be accretive to its earning this year. The company plans to finance the deal through a mix of cash and debt.

Hostess announced it would go out of business late last year.

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