Boeing sees early-May restart of 787 deliveries

Boeing is aiming to begin delivering 787s again in early May.

The 787 has been grounded since mid-January because of smoldering batteries. Federal authorities have approved Boeing's redesigned battery system.

The new battery setup has been installed on 10 787s that belong to airlines, and on nine more that have been built but not delivered, said Boeing Co. Chairman and CEO Jim McNerney on Wednesday.

He said "the bulk" of 787s already in the airlines' possession will get the battery fix by mid-May. Boeing has said each installation will take about five days.

Boeing kept producing the 787 even though it was grounded. But it can only collect the cash from airlines when it delivers the planes — so restarting deliveries is important.

The fix should keep any battery problems "from affecting the airplane or even being noticed by passengers," McNerney said on the company's quarterly earnings conference call.

One 787 experienced a fire after landing, while smoke forced an emergency landing on another. Boeing has gotten clearance from the Federal Aviation Administration for a redesigned battery system that the company says should sharply reduce the risk of a fire. Once the FAA approves the fix on individual planes, airlines can start flying them again.

On Tuesday, United Airlines moved one of its six 787s to a Boeing facility in San Antonio, Texas, so it can get the battery fix.

Despite the 787 troubles, Boeing's net income rose 20 percent in the first quarter.

The big airplane maker earned $1.11 billion, or $1.44 per share. Excluding pension contributions, Boeing would have earned $1.73 per share, well above analyst expectations.

Revenue fell 3 percent to $18.89 billion because Boeing delivered just one 787 before the plane was grounded.

Boeing still expects to meet its financial and delivery targets this year. That includes delivering at least 60 787s. It delivered 137 planes during the quarter, because faster production of 737s and 777s offset the lack of 787 deliveries.

The quarter didn't include any special charges for the 787 or for the automatic government spending cuts that took effect last month.

Profit rose in Boeing's defense and commercial airplane units, even though revenue fell in both.

Boeing shares rose $2.97, or 3.4 percent, to $91.15 in morning trading after rising as high $92.65 earlier. That was the highest level for the shares since December 2007, according to FactSet.

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Thermo Fisher announces record first quarter revenue

Waltham-based health-care equipment company Thermo Fisher Scientific Inc. said today its first quarter revenue rose 4 percent to a first quarter record of $3.19 billion.

Company shares rose nearly 1.8 percent this morning to a high of $82.09.

Thermo officials said the company's adjusted operating income for the first quarter of 2013 rose 7 percent compared to the same period a year ago, while its adjusted earnings per share spiked 17 percent to a record $1.37.

"We're pleased with our solid first quarter results, with good performance on the top line," said Marc N. Casper, company president and chief executive officer, in a statement. "Although the macro environment played out at the lower end of our expectations, our teams executed well to continue our growth momentum into 2013."

Casper added that Thermo is updating its 2013 guidance based on the company's "solid" first quarter performance, and its decision to suspend share buybacks in light of its pending $13.6 billion acquisition of Life Technologies, which was announced last week.

The company is updating its revenue guidance range from $12.8 billion to $13 billion to a new range of $12.84 billion to $13 billion, resulting in 3 percent to 4 percent growth year-over-year. Thermo Fisher is also updating full-year 2013 adjusted EPS guidance from $5.32 to $5.46 to a new range of $5.27 to $5.39, which would lead to 7 percent to 9 percent growth over last year.

The 2013 guidance does not include the acquisition of Life Technologies or the impact of related financing activities, officials said.

Thermo Fisher's acquisition of Life Technologies, which is based in Carlsbad, Calif., is expected to close early next year. The sale marks Thermo Fisher's largest acquisition since the $12.8 billion merger in 2006 of Thermo Electron and Fisher Scientific International.

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GM says Chevy Spark EV can go 82 miles per charge

DETROIT — General Motors said Wednesday that the battery-powered version of its Chevrolet Spark mini-car can travel up to 82 miles on a single charge, putting it among the leaders in mass-market electric vehicles sold in the U.S.

The Spark EV also gets the equivalent of 119 miles per gallon in testing monitored by the U.S. Environmental Protection Agency. GM said that makes it the most efficient car available for sale to the public. The figure is for combined city and highway driving.

The tiny electric Chevrolet goes on sale in July in Oregon and California. GM hasn't released the price but has said it will be less than $32,500, excluding a $7,500 federal tax credit. The company also hasn't said when it will go on sale in other states.

The Spark enters the market at a time when gasoline prices nationwide are relatively low. The average price of a gallon of regular gas on Wednesday was $3.52, 33 cents less than the same time last year, according to AAA. Lower gas prices and a limited range have held down U.S. electric car sales.

Other electric cars can travel farther on a single charge. The Fiat 500e, for example, can go 87 miles on a charge according to EPA estimates, while versions of the Tesla Model S can travel up to 265 miles per charge.

Spark still gets a better mpg rating because its battery weighs less. A lighter-weight vehicle burns less gas.

The Scion IQ EV has a higher gas mileage equivalency figure than the Spark EV at 121 mpg, but GM says it is sold only to fleet buyers such as governments.

The motor and other driveline parts for the Spark EV are made in Baltimore, but the car is assembled in South Korea along with the gasoline version.

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Orders for US durable goods fall 5.7 pct. in March

WASHINGTON — Orders for long-lasting U.S. factory goods fell in March by the most in seven months. The drop reflected a steep decline in commercial aircraft demand and little growth in orders that signal future business investment.

The Commerce Department said Wednesday that orders for durable goods declined 5.7 percent in March. That followed a 4.3 percent gain in February, which was revised lower.

Weaker economies overseas and the impact of across-the-board government spending cuts have made businesses more cautious. That's reduced demand for manufactured goods. Spending on defense equipment also fell sharply last month.

Durable goods are items expected to last at least three years. Orders for durable goods tend to fluctuate sharply from month to month and economists cautioned against reading too much into one monthly decline.

A measure of business investment plans, which include industrial machinery and computers, ticked up 0.2 percent last month. Economists pay close attention to so-called core capital goods orders because they strip out more volatile defense and aircraft orders.

Increases last month in both orders and shipments of core capital goods suggest businesses spent more on equipment and software in the January-March quarter. That likely contributed to economic growth in the first quarter.

Still, most of the quarterly gain reflected a huge increase in January. Orders fell sharply in February and rose only slightly last month. That indicates businesses may be spending less on equipment in the April-June quarter, economists said.

"This doesn't look like we're entering some kind of downward spiral," said Jonathan Basile, an economist at Credit Suisse. "This seems like a downshift from stronger growth."

The overall decline in durable goods was exacerbated by a 48.2 percent fall in commercial aircraft orders. Boeing Co. reported that it received orders for only 39 aircraft, compared to 179 in the previous month.

Orders for defense aircraft and other military goods also dropped. That likely reflects the impact of automatic government spending cuts that began on March 1. Joseph LaVorgna, an economist at Deutsche Bank, noted that orders for defense equipment fell to their lowest level in over seven years.

Excluding aircraft and transportations demand, orders dropped 1.4 percent, the second straight decline.

Demand fell in most types of goods. Orders dropped for metals such as steel and aluminum, metal parts, electrical equipment and appliances, and defense aircraft. Orders increased for computers and communications equipment.

Many economies overseas are also sluggish, reducing exports. China's manufacturers grew at a slower pace in March, according to a survey released Monday, as export orders and employment declined. Europe's economy has been in recession.

Rockwell Automation, which makes machinery and software for mostly industrial customers, said Wednesday that its first-quarter sales in Asia dropped 16 percent compared with the same period a year earlier. Demand slowed in China and India.

Sales ticked up just 2 percent in the United States. Ted Crandall, Rockwell's chief financial officer, said ongoing uncertainty about U.S. budget policies "may have caused some customers to hold back a little bit on capital spending."

The U.S. economy likely grew at a healthy 3.1 percent annual rate in the first quarter, up from only a 0.4 percent rate in the fourth quarter. The Commerce Department will release its first estimate for January-March growth on Friday.

But many economists expect growth has begun to slow to a rate of 2 percent or less in the current April-June quarter.

Higher Social Security taxes have reduced Americans' take-home pay this year. That's starting to limit their spending power. The government spending cuts will also likely weigh on growth.

Other reports suggest that manufacturing is starting to weaken after showing signs of strength over the winter. Strong auto production hasn't been enough to offset broader slowdowns in other industries.

Factory output slipped in March, according to a Federal Reserve report last week. And a survey of purchasing managers earlier this month found that manufacturing expanded at a slower pace in March compared with February. The Institute for Supply Management's survey showed that new orders and production declined sharply.

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Amazon.com's most well-read city: Alexandria, Va.

NEW YORK — Alexandria, Va., and Knoxville, Tenn., are cities for readers, if not always the kinds of books your parents wanted you to read.

Alexandria and Knoxville ranked No. 1 and No. 2 on Amazon.com's annual list of U.S. cities buying the most books, newspapers and magazines per capita from the online retailer.

E L James' erotic "Fifty Shades of Grey" trilogy was a big hit in both places, especially in Knoxville, which advanced from No. 12 last year.

The list released Wednesday includes cities with populations of 100,000 or more. Alexandria, located just outside Washington, D.C., also topped the list last year.

Miami was No. 3. Next were Cambridge, Mass.; Orlando, Fla.; Ann Arbor, Mich.; Berkeley, Calif.; Cincinnati; Columbia, S.C.; and Pittsburgh.

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Online privacy is evolving. Does it matter to you?

WASHINGTON — Online privacy rules are changing. The question now is how much you'll care.

America's tech industry is finalizing voluntary disclosure standards on the sensitive information being sucked from your smartphone like your location, surfing habits and contacts. Senate Democrats are pushing for a clearer opt-out button for all online tracking. And Microsoft is offering a new browser that encourages people to block the technology that enables tracking.

Industry officials say they understand some people want greater control. But they are betting that consumers don't really mind trading some basic information about themselves for free access.

"Consumers are very pragmatic people," Lou Mastria, managing director of the Digital Advertising Alliance, said in an interview this week. "They want free content. They understand there's a value exchange. And they're OK with it."

Mobile applications like Google Maps, Angry Birds and GasBuddy have become popular, inexpensive ways to personalize smartphones or tablets and improve their functionality. Often free or just 99 cents to download, apps can turn a phone into a sophisticated roaming office or game console with interactive maps and 24-7 connectivity.

But like all those websites that offer medical advice or parenting tips, there's a hitch: They want information from you like your birthdate or ZIP code. Developers say data collection is necessary for the software to work as promised and to reward the intellectual creativity behind it.

"There's no free lunch," said Adam Thierer, a senior research fellow at George Mason University's Mercatus Center. "It's essentially a quid pro quo. You'll trade a little bit of information for all that free content and great services."

The online privacy debate has stumped Congress and prompted limited input from the Obama administration, mindful of consumers' concerns but reluctant to crush a growing industry in a difficult economy.

Some lawmakers, mostly Democrats but some libertarian Republicans, say consumers should have the option of not being tracked at all. Sen. Jay Rockefeller, D-W.Va., chairman of the Senate Commerce, Science and Transportation Committee, planned a hearing Wednesday to press his proposal to subject companies to penalties by the Federal Trade Commission if they violate a consumer's "do not track" request.

Industry is pushing back. The Digital Advertising Alliance points to its web-based icon program that links consumers to an opt-out site of participating advertisers. They say some 20 million people have visited their site and only 1 million of those consumers chose to opt out of all ad tracking.

But privacy advocates, backed by the FTC, say the issue goes well beyond targeted advertising, particularly when it comes to a mobile device. Because a smartphone can divulge a person's location, the FTC warned in a recent report that detailed profiles of a person's movements can be collected over time and in surprising ways, revealing a person's habits and patterns and making them vulnerable to stalking or identity theft.

Some researchers also say they suspect retailers are engaging in "price discrimination" — the practice of setting a price based on personal data, such as the average home price in their area or a person's proximity to a competitor.

Marc Rotenberg, executive director of Electronic Privacy Information Center, said most consumers aren't even aware of the extent to which their information is being collected and how it's used. And as with any product on the market, companies should be required to take meaningful steps to make sure people don't get hurt, he said.

"You shouldn't be put at risk if a car is correctly designed when you go on the highway," Rotenberg said. "And that's our view of Internet-based services. People shouldn't have to lose their privacy to use Internet-based services."

FTC Commissioner Julie Brill says the biggest concerns are all the unknowns. The FTC has asked nine data brokers to disclose what information they collect on consumers and how they use it. Brill said she worries that companies might determine a person's eligibility for certain products and services based on information collected online, potentially violating credit reporting and fair lending laws, but without authorities knowing it.

"The industry is moving so quickly and changing so much that we need to make sure that the laws are keeping up with it," Brill said in a recent interview.

So far, the only solution to emerge has been voluntary industry standards. The Commerce Department's National Telecommunications and Information Administration has been coordinating among some 80 industry lobbyists, consumer advocates, academics and technology experts to devise the new disclosure standards for mobile apps that would offer consumers a quick, easy-to-read snapshot of what information is collected and whether it's shared with third parties.

While the final agreement isn't expected until later this spring, the privacy disclosures are expected to look less like a legal manifesto and more like a nutrition label. Just as some snacks are labeled as high in fat or sodium, some mobile apps might have to fess up to being bigger data collectors than others.

In the end, Thierer isn't sure consumers will care that they've been labeled by a marketing company as someone who, for example, likes to play "Angry Birds" and lives in Ohio.

"The problem is that a lot of these cases driving the debate are worst-case scenarios ... but in reality they are still hypothetical," Thierer said.

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Sprint, T-Mobile delay S4 phone, cite inventory

NEW YORK — Sprint and T-Mobile are delaying shipments of Samsung's latest flagship phone, citing inventory issues.

The delays in the Galaxy S4 appear to be the result of supply disruptions from Samsung, rather than heavier-than-expected demand. In statements Wednesday, T-Mobile said the delay is with "inventory deliveries," while Sprint said it's "due to unexpected inventory challenges from Samsung." Samsung Electronics Co. said it was working on a statement.

Sprint's launch was scheduled for Saturday. Sprint Nextel Corp. said it still expects to sell the device over the Internet and by phone, but retail stores and other distribution channels won't get them until later. The company didn't say when.

T-Mobile had expected to start taking orders online on Wednesday. That's now expected to start Monday. There was no word on whether T-Mobile still planned to start retail store sales on May 1.

The S4 has a slightly larger screen than its predecessor, the Galaxy S III, but it's lighter and smaller. The S4 sports new camera tools, an optical-reader app and the ability to perform tasks by waving a finger over a sensor.

Sprint charges $250 for the base model, with 16 gigabytes of memory, or $150 if the buyer is coming over from another carrier. A two-year contract is required.

T-Mobile USA is charging $150 up-front and $20 per month for two years under its new installment plans. Those plans replace two-year service contracts that most carriers require. T-Mobile has abandoned them in favor of cheaper month-to-month plans.

AT&T Inc. said it was planning to start selling the S4 in stores on Saturday as scheduled. The company already has started taking advance orders and plans to ship the phones starting next Tuesday. AT&T is charging $200 for the base model, with a two-year contract.

Verizon Wireless has said it will sell the phone, but hasn't announced a release date or price. Smaller carriers U.S. Cellular, Leap Wireless' Cricket and C Spire will also sell the phone.

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Barclays returns to profit in Q1

LONDON — Barclays PLC on Wednesday reported a return to profit in the first quarter, as it tries to restructure and get past recent scandals.

In the three months ending March 31, Barclays made an adjusted profit after tax of 839 million pounds ($1.3 billion). That contrasted with a 589 million pound loss a year earlier and came despite a 5 percent fall in income to 7.7 billion pounds.

Costs included 514 million pounds for "Project Transform," which aims to shed 3,700 jobs, trim Barclays' investment banking arm and move on from scandals that included a $450 million fine for its involvement in the rigging of a key market interest rate.

Chief executive Antony Jenkins said Barclays expected to spend another 500 million pounds on Project Transform in 2013.

"While there remains much to do to build a stronger and more resilient Barclays, we are completely focused on executing our Transform program and are making good early progress," said Jenkins, whose predecessor, Bob Diamond, resigned in the wake of the rate-rigging scandal.

Barclays' investment arm performed solidly, with profit rising 11 percent to 1.3 billion pounds.

Shares in the bank closed 1.3 percent lower Wednesday at 2.95 pounds.

But analysts said the results were good news for the bank.

"Barclays has a Herculean task in reinventing itself whilst at the same time continuing to grow the business," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers. "The update shows that the challenge is being faced head on, with a cultural shift in train and a more general restructuring being actively pursued."

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Senators say military should buy US athletic shoes

PORTLAND, Maine — U.S. Sens. Susan Collins and Angus King of Maine have written a letter signed by 13 other senators asking that the Department of Defense be required to buy only American-made athletic footwear for military personnel.

The April 19 letter asks President Barack Obama to direct the department to follow a 1941 law requiring the military to buy American-made products for soldiers whenever possible.

As a rule, the Defense Department purchases shoes and clothing that are made in America, the senators said. The department used to treat athletic footwear the same way, but in recent years it's been giving military personnel a cash allowance to buy their own footwear.

Collins and King said the military's policy has placed jobs in jeopardy in states such as Maine and Massachusetts, where Boston-based New Balance Athletic Shoe Inc. has offices and plants. New Balance is the last major American athletic footwear manufacturer.

"We can increase American footwear manufacturing jobs at no cost to the federal government simply by your directing the Department of Defense to align its athletic footwear procurement policies to those it has already adopted for other footwear, such as combat boots, service shoes, and other uniform items," the letter said.

U.S. Rep. Michael Michaud of Maine has been calling for the military to buy U.S.-made athletic footwear for a couple of years.

To drive home his point, he gave the president a pair of custom-made New Balance sneakers with "President Obama" sewn on the heels during a visit to Maine last year.

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Obama administration had advance warning on Fisker

WASHINGTON — The Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion dollar government loan, nearly a year before U.S. officials froze the financing after questions were raised about the company's statements, newly released documents show.

An Energy Department official said in a June 2010 email that Fisker's bid to draw on the federal loan may be jeopardized for failure to meet goals established by the Energy Department.

Despite that warning, Fisker continued to receive money until June 2011, when the Energy Department halted further funding. The agency did so after Fisker presented new information that called into question whether key milestones — including launch of the company's signature, $100,000 Karma hybrid — had been achieved, according to a credit report prepared by the Energy Department.

The December 2011 credit report said "DOE staff asked questions about the delays" in the launch of the Karma "and received varied and incomplete explanations," leading to the suspension of the loan. Fisker had received a total of $192 million of the $529 million loan before it was suspended.

In the June 2010 email, Sandra Claghorn, an official in the Energy Department loan program office, wrote that Fisker "may be in limbo due to a lack of compliance with financial covenants" set up by the department to protect taxpayers in the event of default. Another document, from April 2010, listed milestones that Fisker had not yet met.

Aoife McCarthy, a spokeswoman for the Energy Department, said the June 2010 email was taken out of context.

"The document shows that one person at a meeting discussed the possibility that Fisker might not meet a financial commitment" required by the Energy Department, McCarthy said in an email late Tuesday. The department received the needed certification five days later and subsequently made the loan payment, she said.

The Associated Press obtained the Fisker documents ahead of a House hearing scheduled for Wednesday on the federal loan to the troubled car maker, which has laid off three-fourths of its workers amid continuing financial and production problems.

The potential loss of $171 million would be largest loss of federal loan money since the 2011 failure of solar panel maker Solyndra. That company's collapse, which came despite a $528 million loan from the Energy Department, has triggered criticism of the Obama administration's green energy program. Fisker received money from a similar loan program started under the Bush administration.

The Energy Department seized $21 million from Fisker this month as it continued to seek repayment from the car maker for the 2009 loan. A payment from Fisker was due Monday but was not made, an Energy Department official said.

A top Energy Department official said the department acted "decisively" to protect taxpayers' interests since Fisker's financial woes became clear nearly two years ago. In testimony prepared for Wednesday's hearing before a House Oversight and Government Reform subcommittee, Nicholas Whitcombe, former acting director of the car loan program, said the department stopped payments to Fisker in June 2011 after the company failed to meet milestones required in the loan agreement.

Since then, "the department has continued to communicate with Fisker as it has sought to revise its business plan and achieve profitability," Whitcombe said in prepared testimony. The Energy Department is "committed to ensuring that the taxpayers' interests are protected to the maximum extent possible," he added.

But Rep. Jim Jordan, chairman of the Oversight subcommittee on economic growth and regulation, said it is hard to understand why the Energy Department ever thought Fisker was a viable company that should receive taxpayer money.

"The Obama administration owes the American taxpayer an explanation as to why this bad loan was made in the first place, and what they are going to do to minimize the loss that taxpayers face," said Jordan, R-Ohio.

Henrik Fisker, the company's namesake and founder, was scheduled to testify at Wednesday's hearing. Fisker, who was forced out as CEO as the company's troubles mounted, said in prepared testimony that he remained proud of the company's "cutting edge technology," which he said could "pave the way for a new generation of American car manufacturing."

Fisker disputed claims by some critics that the Anaheim, Calif.-based company needed the federal loan to survive. Fisker said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.

"At that time, we already had significant financial backing from private investors," Fisker said in the prepared testimony. In all, the company received more than $1 billion in private financing, he said.

The company met initial milestones set up by the Energy Department before informing the department that it would not meet future goals on time, Fisker said. He denied that any political influence was used to obtain the loan or in negotiations over its terms.

"I am not aware and do not believe that any improper political influence was used in connection with the company's loan application or subsequent negotiations with the Department of Energy," Fisker said.

Vice President Joe Biden announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. The plant was never completed and never produced any cars.

Fisker said the company was hurt badly by the 2008 recession and by the bankruptcy of A123 Systems, a Massachusetts company hired by Fisker to make batteries for the Karma. A bankruptcy judge granted Fisker $15 million in a claim against A123 for breach of warranty, a fraction of Fisker's initial claim.

Fisker has not built a vehicle since last summer and has failed to secure a buyer as its cash reserves have dwindled.

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Follow Matthew Daly on Twitter: https://twitter.com/MatthewDalyWDC

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