Morning Business Memo:
As Facebook (FB) faces questions about its profit model, the work and social network LinkedIn (LNKD) has become an investor favorite. The site booked a profit in the third quarter, reversing a loss in the same period a year ago as revenue grew at a faster pace than analysts expected. Its stock climbed 6 percent in after-hours trading. LinkedIn says it earned $2.3 million, or 2 cents per share, in the July-September period. That’s up from a loss of $1.9 million, or 2 cents per share, a year ago. Profits were twice as high as analysts had estimated. The professional work site has been an exception among Internet companies that have gone public in recent years. Others, including Facebook, Groupon (GRPN) and Zynga (ZNGA), are trading well below their initial public-offering prices. LinkedIn’s stock price, meanwhile, has more than doubled since its May 2011 IPO.
Hot coffee! Starbucks (SBUX) has raised its forecast for the year. The coffee chain says more customers are going to its cafes, even in the challenging global economy. Starbucks reports global revenues during the latest quarter rose 6 percent, compared with the year before, driven by higher customer traffic. Starbucks lifted its guidance for the year ending in September 2013.
The big story for financial markets today is neither Sandy nor the election. It’s jobs. The Labor Department’s monthly employment report comes after a flurry of positive reports on construction, retail sales and consumer confidence pushed stock averages up, with the best one-day showing for financial markets in seven months. The government’s October survey is based on two sets of numbers. The U.S. unemployment rate comes from a survey of households, with the numbers compiled by Census Bureau workers. The second part of the report, considered more accurate by many economists, is a larger survey of businesses that accounts for the number of new jobs created.
A new estimate says Hurricane Sandy could be the second-most expensive storm in U.S. history, after Katrina. Forecasting firm Eqecat says the damage from the storm will likely be far worse than previously predicted, largely a result of Sandy’s hitting the most densely populated area in the country. The firm doubled its previous estimate for the total bill and now says Sandy might have caused between $30 billion and $50 billion in economic losses, including property damage, lost business and extra living expenses. Katrina’s costs in 2005 were estimated to be $108 billion. Taking inflation into account, that works out to $128 billion today.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc