Roundup: Huntington Bancshares to cut 200 jobs; Kennametal posts drop in 1Q profit; more
Huntington Bancshares to cut jobs in 6 states
Huntington Bancshares is laying off about 200 employees across six states as part of a restructuring. The Columbus, Ohio-based bank did not say how many people would be affected in Pittsburgh, where it has its regional headquarters. Huntington has 510 employees in Pittsburgh and more than 12,000 overall, spokeswoman Maureen Brown said on Thursday. The layoffs target “a few internal functions to improve the long-term efficiency of the bank,” Brown said. The affected employees will be given transition pay and outplacement services, she said. The cuts are expected to save $30 to $35 million annually and be finished by the end of August, the bank said in a regulatory filing. Two weeks ago, the bank reported second-quarter profit increased by 9 percent, to $165 million, from a year ago.
Kennametal posts profit drop
Kennametal Inc. reported lower net income for the final quarter of its fiscal year, blaming restructuring charges related to its $607 million acquisition of a tungsten materials business in November from Allegheny Technologies Inc. The Unity-based manufacturer of tooling equipment for manufacturing and mining companies said net income was $45.5 million, or 57 cents a share, down $60.8 million, or 76 cents a share, from a year ago. Sales increased 15 percent to $772.2 million from $671.4 million last year, including the tungsten business that Kennametal is restructuring. The tungsten unit contributed $72 million in sales, but acquisition and restructuring charges totaled $14 million before taxes. A part of the unit was sold for $10 million, at a loss of $1 million. CEO Carlos Cardoso said the company will move to reduce costs but gave no details.
Debit overdraft fees often exceed cost of purchase
The fees that banks charge debit-card users who overdraw their accounts usually cost more than the items being bought. That's the result of a study that the Consumer Financial Protection Bureau released on Thursday. Large banks have generally charged a $34 penalty when people overdraw their debit-card accounts, even though most of the purchases involved were for less than $24. And the penalties are charged even though most accounts return to a positive balance within three days, the study found. Banks profit by collecting more than half their checking account income from these fees. The study builds on a 2013 report that found that heavy overdrafters, on average, face $900 in additional costs each year.
Apple slicing jobs at Beats
About 200 positions at Beats could be eliminated as the headphone maker and streaming music service folds into Apple Inc., according to a Bloomberg report. Apple agreed to purchase Beats Electronics and Beats Music for $3 billion in May, and the largest acquisition by price in Apple history is expected to be finalized soon. All Beats employees are transitioning to Apple. But about 200 of the company's 700 workers are receiving guaranteed terms of only three months to a year. They'll have to compete for other internal openings beyond that, according to the report.
A Beats spokeswoman declined to comment.
Families borrowing less for college, report finds
Americans are borrowing less for college and instead relying more on savings and income, a study from a student lender found. In the 2013-2014 school year, the typical family paid 22 percent of the total college cost through borrowing, according to Sallie Mae's annual How America Pays for College study. That's down from 27 percent in the previous two years. Meanwhile, the share of college costs paid through savings and income rose. Student savings and income paid for 12 percent of costs on average, up from 11 percent in the previous year. Parent savings and income rose from 27 percent to 30 percent. A large reason behind the shift was that parents making more than $100,000 significantly boosted their contributions to their children's education.
— Staff and wire reports