Business Digest: U.S. pending home sales surge in February


HOUSING MARKET

U.S. pending home sales surge in February

WASHINGTON — More people signed contracts to buy U.S. homes last month as warm weather and rising confidence appeared to encourage consumers to look for houses.

The National Association of Realtors said Wednesday that its pending home sales index climbed 5.5 percent in February to 112.3, its highest point since April and its second-highest point since 2006.

Lawrence Yun, the National Association of Realtors’ chief economist, said a rising stock market had helped bolster confidence. In addition, rising prices might have nudged some people into making offers for homes now out of fear of having to pay more if they wait.

The association’s index of pending home sales rose 11.4 percent in the Midwest, 4.3 percent in the South, 3.4 percent in the Northeast and 3.1 percent in the West.

AUTOMAKERS

Ford recalls 570K vehicles over two issues

DETROIT — Ford is recalling more than 570,000 vehicles in North America and Europe to fix separate problems that can cause engine fires and doors to fly open unexpectedly.

The recalls will hit the company’s bottom line in the first quarter of this year. Ford said in a Wednesday filing with securities regulators that the recalls will cut pretax earnings by $295 million.

The engine fire recall covers over 360,000 vehicles in North America and Europe. In North America it includes Escape SUVs from the 2014 model year, plus the 2014 and 2015 Fiesta ST, the 2013 and 2014 Fusion and the 2013 through 2015 Transit Connect.

A lack of coolant circulation could cause the engine to overheat, causing a crack in the cylinder head, according to Ford. If that happens, pressurized oil can leak through the crack, and if it hits a hot surface, could cause an engine fire. The company says it has 29 reports of fires in the U.S. and Canada, but no injuries.

The company also is adding 211,000 vehicles to a 2015 recall to replace faulty door latches. That recall covers the 2014 Fiesta and the 2013 and 2014 Fusion and Lincoln MKZ. The expansion brings the total from the 2015 recall to nearly 757,000.

CORPORATE EARNINGS

Lululemon’s shares drop after weak outlook

NEW YORK — Shares of Lululemon Athletica Inc. fell more than Wednesday after the athletic-inspired sportswear company said it had a slow start to the year and offered a weaker outlook than expected for the current quarter.

The company — known for its yoga gear — did report growth in both earnings and revenue for its fiscal fourth quarter.

Lululemon said it earned $136.1 million, or 99 cents per share, for the three months that ended Jan. 29. That compares with $117.4 million, or 85 cents per share, a year earlier. Revenue came to $789.9 million, up from $704.3 million a year earlier. Analysts expected earnings of $1.01 per share on revenue of $783 million, according to FactSet analysts.

But Lululemon disappointed investors by saying it expects net revenue of $510 million to $515 million for the current quarter. Analysts had projected $553 million, according to FactSet. The company also forecast earnings per share of 25 cents to 27 cents for the first quarter. Analysts had expected 39 cents per share, according to FactSet.

ENERGY

Cenovus buying most of ConocoPhillips’s Canadian assets

CALGARY, Alberta — Cenovus Energy announced Wednesday it will pay $17.7 billion Canadian (US$ 13.2 billion) for most of ConocoPhillips’ Canadian assets.

Houston-based ConocoPhillips is the latest company to reduce exposure to Canada’s oil sands — the world’s third-largest oil reserves.

The deal includes ConocoPhillips’s 50 percent interest in FCCL Partnership, an oil sands venture between the two companies in northern Alberta, as well as the majority of ConocoPhillips’s Deep Basin conventional assets in Alberta and British Columbia. The combined assets have forecast 2017 production of approximately 298,000 barrels of oil equivalent daily.



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