Penney’s profit up 36 percent, but stock falls on price fears

Cutting costs and selling more exclusive brands like Liz Claiborne drew new customers and helped J.C. Penney Co.’s fourth-quarter profit rise 36 percent, the company said Friday.

The results capped a week of similar reports from clothing and department store chains. And, like Gap Inc. and Kohl’s Corp., J.C. Penney announced a new share buyback.

But Penney’s shares fell $1.91, or 5.2 percent, to $34.62 by midday as investors appeared worried that price increases ricocheting through the retail industry would particularly hurt Penney’s middle-income customers.

Macy’s Inc., Kohl’s and Abercrombie & Fitch Co. all said their shoppers should expect price increases as merchants grapple with soaring costs of labor in China and raw materials worldwide.

Penney’s reported net income of $271 million, or $1.13 per share, for the three months that ended Jan. 29. That compares with $200 million, or 84 cents per share, in the same period last year.

Caesars reports quarterly loss as casino in N.J. struggles

Caesars Entertainment Corp., the world’s largest casino operator, said Friday that it reported a loss for its fourth quarter as gamblers kept a tight rein on their spending.

But Caesars said Las Vegas is showing signs of stabilizing while Atlantic City still struggles.

The privately-held casino and resort operator said it lost $196.7 million for the period ended Dec. 31. That compares with net income of $295.6 million a year earlier, including a substantial one-time benefit.

Caesars said its quarterly revenue rose 1 percent to $2.12 billion from $2.1 billion. Its full-year revenue fell 1 percent.

Britain blames harsh weather for sharper decline in GDP

The British economy shrank more than previously thought in the final quarter of 2010, according to revised figures released Friday, dealing a further blow to the country’s shaky recovery from recession.

The Office for National Statistics reported that gross domestic product declined by 0.6 percent between October and December. The contraction was previously estimated at 0.5 percent.

The agency said that severe weather in December, when Britain was hit by heavy snowfalls, was largely to blame for the plunge in the final three months of the year.

But the data also showed that household spending declined 0.1 percent — the first drop since the second quarter of 2009.

Court backs Starbucks’ bid to end partnership with Kraft

Starbucks Corp. is one step closer to ending its distribution partnership with Kraft Foods Inc. after a U.S. Appeals Court on Friday upheld a lower court ruling against Kraft.

The food maker began distributing Starbucks coffee to groceries and other stores more than a decade ago.

After Starbucks announced in November that it planned to end the arrangement, Kraft tried to get a federal court to prevent Starbucks from abandoning their relationship. The court denied that request in January.

On Friday, the U.S. Court of Appeals for the 2nd Circuit in New York upheld the lower court’s ruling and said Kraft failed to show it faces irreparable harm if Starbucks breaks away before a separate arbitration process ends.

Sales at grocery stores and other retailers are increasingly important to Starbucks as it tries to expand its business beyond cafes.

J&J increases CEO’s salary despite steep drop in stock

Health care giant Johnson & Johnson raised Chief Executive William Weldon’s salary but cut his annual bonus for 2010, after two years of revenue declines and an unprecedented string of recalls involving Tylenol and other household medicines.

The New Brunswick, N.J.-based company set Weldon’s salary at $1.92 million effective Jan. 1, up 3 percent from $1.86 million in the previous year. The company disclosed the pay raise Friday in a Securities and Exchange Commission filing.

But the company cut Weldon’s annual bonus 45 percent to $1.97 million from $3.6 million in 2009.

In 2010, J&J’s stock fell 4 percent to $61.85, a steep decline for a diversified company that sells everything from Band-Aids to chemically engineered biotech drugs.

Judge handling Toyota suits seeks to protect throttle code

A federal judge overseeing lawsuits against Toyota Motor Corp. for sudden acceleration problems is considering ways to prevent leaks of the source code the carmaker calls the “crown jewel” of its intellectual property.

U.S. District Judge James B. Selna said Friday that the automaker can monitor plaintiff experts’ access to its proprietary source code, and they should go through Toyota’s server to access the ultra-secret programming.

The judge told attorneys to agree on a final order to be submitted March 7.

The source code is the programming at the heart of Toyota’s electronic throttle control system, the system targeted by lawsuits alleging injuries and deaths caused by out-of-control Toyota vehicles.

The question of how much access plaintiffs will have to that code has been a key point of contention.

DirecTV says first-year CEO received $32.7 million in 2010

Michael White, who just completed his first year as CEO of DirecTV, received a pay package valued at $32.7 million in 2010.

That’s according to an Associated Press review of data filed with regulators.

Most of the pay came in the form of stock and option awards worth $27.2 million when they were granted. However, the El Segundo, Calif.-based satellite TV company said White won’t receive additional awards during the rest of his three-year contract.

Last year, DirecTV Group Inc. increased revenue, profits and subscribers.

U.S. shuts down Illinois bank, raising total for year to 23

Regulators have shut down a small bank in Illinois, raising to 23 the number of U.S. bank failures this year after the limping economy and soured loans felled 157 banks in 2010.

The Federal Deposit Insurance Corp. on Friday seized Valley Community Bank, based in St. Charles, Ill. The bank has five branches, $123.8 million in assets and $124.2 million in deposits.

First State Bank, based in Mendota, Ill., agreed to assume the assets and deposits of the failed bank.