Business news in brief

Toyota vehicles on display Thursday in Tokyo. Six automakers are recalling 3.4 million older-model vehicles worldwide because of defective air bags that can send shrapnel into the passenger area. The recall mainly affects Japanese autos sold in North America, Europe, and Japan. The bags' maker, Takata Corp., says no one has been hurt.
Toyota vehicles on display Thursday in Tokyo. Six automakers are recalling 3.4 million older-model vehicles worldwide because of defective air bags that can send shrapnel into the passenger area. The recall mainly affects Japanese autos sold in North America, Europe, and Japan. The bags' maker, Takata Corp., says no one has been hurt. (Bloomberg News)
Posted: April 12, 2013

In the Region

Pa. Turnpike bond rating down

Massive borrowing and fewer-than- expected toll payers on the Pennsylvania Turnpike have prompted a downgrade in the Turnpike Commission's bond rating. Moody's Investors Service lowered the rating to A1 from Aa3 on $3.1 billion of senior lien revenue bonds. Moody's cited the commission's massive borrowing to pay for statewide road and transit projects, "continued underperformance of its traffic and revenues compared to . . . forecasts," and higher-than-forecast toll increases. The commission is about $7.5 billion in debt, largely because state Act 44 compels it to pay $450 million a year for non-turnpike projects, in addition to paying for turnpike maintenance and expansion. Commission chief executive Mark Compton said the downgrade was "not surprising." He said Moody's rating was now comparable to those from Standard & Poor's and Fitch. - Paul Nussbaum

Rite Aid shares jump on profit report

Rite Aid Corp., of Camp Hill, reported its second-straight quarterly profit and first annual gain in six years. Shares jumped 33 cents, or 18.44 percent, to $2.12. The retailer said it earned $124.4 million, or 13 cents per share, in its fiscal fourth quarter, ended March 2. That compares with a loss of $163.8 million, or 18 cents per share, a year earlier. Revenue fell about 10 percent to $6.45 billion compared with last year's quarter, which had an additional week. For the full fiscal year, the company earned $107.5 million, or 12 cents per share, on $25.39 billion in revenue. - AP

Bentley's 2012 revenue up 5 percent

Bentley Systems Inc., a privately held Exton provider of computer software used by architects, engineers, and others who deal with infra- structure, reported 2012 revenue of $550 million, a 5 percent increase from $523 million in 2011. The company did not report net income, but said its 2012 operating cash flow was more than $100 million. During 2012, Bentley, which gets more than half its revenue from outside the Americas, spent nearly $200 million on acquisitions and on research and development, it said. - Harold Brubaker

Hill gets contract for Afghan project

Hill International Inc., the Marlton construction manager, said it received a 30-month contract valued at $8.8 million for services in connection with rehabilitation and upgrade of a hydroelectric power plant in Gereshk, Afghanistan. The $50 million project is funded by the Asian Development Bank. - Reid Kanaley

$20M renovation at Harleysville

Nationwide Mutual Insurance Co. said it began a $20 million renovation of its Harleysville Insurance offices in Montgomery County. Nationwide bought Harleysville last May for $758.4 million. The offices in Harleysville, where 900 work, will undergo a complete interior renovation, including new furniture, a new cafeteria, increased meeting space, and new building systems, Nationwide said. The renovation is expected to take 18 months. - Harold Brubaker

IGM to print, handle publications

Broad Street Media publications the Northeast Times and the Star will be printed, packaged, and transported by Interstate General Media, the companies said. IGM is publisher of The Inquirer, the Philadelphia Daily News, and Philly.com. - Inquirer staff

Elsewhere

Unemployment claims down

The number of Americans seeking unemployment benefits fell sharply last week, to a seasonally adjusted 346,000 from 388,000, the Labor Department said. The drop nearly reversed three straight weeks of increases. Applications have been volatile in the last two weeks, largely because of the Easter holiday. The timing of the holiday changes from year to year. That makes it hard to adjust for school holidays and other changes. The drop signals that the job market might be stronger than March's weak month of hiring suggested. Employers added only 88,000 jobs last month, down from an average of 220,000 in the previous four months. - AP

IMF lowers forecast for U.S. growth

The International Monetary Fund lowered its forecast for U.S. growth as automatic budget cuts have taken hold, according to a draft of the Washington- based lender's World Economic Outlook. U.S. gross domestic product will expand 1.7 percent this year compared with a previously forecast 2 percent advance, according to the draft report obtained by Bloomberg News. The draft, which was presented to the IMF board last week, may be subject to revisions before its scheduled April 16 release. The U.S. fiscal tightening that took effect last month will restrain consumption temporarily, the report said. The global economy will expand 3.4 percent this year, compared with 3.5 percent forecast in January, according to projections in the report. The 17-nation euro area will contract 0.2 percent, unchanged from January, with uncertainty stemming from Italy's election adding to challenges facing policymakers fighting Europe's debt crisis, it said. - Bloomberg News

Cyprus bailout grows to $30B

The cost of bailing out Cyprus has grown to $30 billion from $17 billion, according to a draft document by the country's international creditors. Cyprus itself must take on the lion's share of the measures needed to avoid bankruptcy. It would need to raise $17 billion - about double the amount agreed to last month - by imposing heavy losses on large bank deposits, levying more taxes, and other measures. The European Commission, the European Central Bank, and the International Monetary Fund would lend Cyprus $13 billion to recapitalize its shaky banking system and keep the government afloat. That amount is unchanged from the previous agreement. - AP

Mortgage rates fall sharply

Average U.S. rates on fixed mortgages fell sharply this week, keeping home-buying and refinancing attractive. The average rate on the 30-year fixed mortgage fell to 3.43 percent from 3.54 percent last week. That's near the record low of 3.31 percent. The average on the 15-year loan dipped to 2.65 percent from 2.74 percent, and just above the record 2.63 percent. Low mortgage rates are helping sustain a housing recovery that began last year. Home sales and residential construction are up, prices are rising, and more Americans are refinancing. That has helped the broader economy. - AP

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