JNJ Johnson and Johnson

COSTCO WHOLESALE

Cheaper Gas Prices Hurt Same-Store Sales

Costco Wholesale Corp. on Thursday said cheaper gasoline prices hurt same-store sales in May, which were flat from the a year earlier.

Analysts had expected same-store sales to increase 1.4%, according to Thomson Reuters.

Shares of the warehouse-club retailer fell $1.01 to $151.51 in 4 p.m. trading.

U.S. comparable sales increased 1%. Sales in Canada fell 1% and in other international stores declined 3%.

Costco currently operates 706 warehouses, including 494 in the U.S. and Puerto Rico and 90 in Canada.

Core same-store sales, which exclude gasoline-price deflation and foreign-exchange fluctuations, increased 4%.

Costco said Los Angeles-area stores were particularly hit by the decline in gasoline prices.

In total for the month, sales increased to $9.23 billion from $8.98 billion.

Last week, Costco reported that its comparable sales stagnated in the third quarter, coming in flat, though overall profit increased 5.6%.

--Austen Hufford

AIRLINES

Record Profit Is Forecast for Year

The International Air Transport Association on Thursday raised its profit forecast for the global air-transport industry to a record $39.4 billion for 2016 even as traffic growth is slowing and terrorist attacks hurt demand.

Airlines earned $35.3 billion last year and IATA, in December, projected $36.3 billion for this year. Carriers in North America are poised to lead the way in 2016 with $22.9 billion in net profit, IATA said.

The outlook for European profit has weakened as terrorist attacks in Paris in November and Brussels in March weigh on demand. European carriers now are expected to collectively post $7.5 billion in profit, $1 billion less than expected six months ago.

Profit growth is underpinned by the sharp drop in oil prices. IATA said fuel should be about 20% of airline costs this year, down from 33% in 2012-2013 and about 27% last year.

--Robert Wall

VOLKSWAGEN

Europe Still Doubts Emissions Data

BRUSSELS -- The European Commission continues to doubt Volkswagen AG's data on carbon-dioxide emissions, despite assurances by the car maker and the German government that emissions didn't break European Union rules, documents seen by The Wall Street Journal show.

The commission, in charge of enforcing the bloc's environmental rules, has been tussling with Volkswagen since November, when the Wolfsburg, Germany-based company first reported that it may have understated CO(2) emissions from some 800,000 cars.

In contrast with nitrogen-oxide emissions -- which are at the center of the car maker's diesel-engine troubles in the U.S., but outside the commission's remit -- the EU's executive arm can impose fines on auto makers that break legal caps on CO(2) emissions. CO2 is a greenhouse gas that contributes to climate change.

The commission first demanded that Volkswagen provide details on its fleet's CO(2) emissions on Nov. 9, a few days after the company announced that data inaccuracies spread beyond NOx emissions. At the time, Climate and Energy Commissioner Miguel Arias Cañete gave Volkswagen 10 days to send a response.

Since then, the company has received several extensions, citing extra time needed for Germany's motor-transport authority KBA to complete its assessment of the emissions from Volkswagen's fleet.

Almost seven months after the initial request for information, commission officials say they are growing frustrated with the slow pace and lack of detail of the company's response to their queries.

In a one-page letter dated May 3 and seen by the Journal, Volkswagen Chief Executive Matthias Müller informed Mr. Cañete that KBA had completed its assessment of CO(2) emissions from Volkswagen cars and ordered adjustments to the fuel consumption of six model variants of the 2016 production line. Those adjustments increase fuel consumption by between 0.1 and 0.2 liter per kilometer and will be applied to 36,000 cars, Mr. Müller wrote.

"Concerns that earlier mode years could have been affected haven't materialized," he added.

A follow-up letter from German Transport Minister Alexander Dobrindt three days later confirmed KBA's findings, but added that the authority was still awaiting results for a seventh model variant. Overall, Mr. Dobrindt wrote, the adjustments increase CO2 emissions for the affected cars by 1 to 6 grams per km.

That would leave average CO2 emissions from Volkswagen's fleet below the EU's 130g/km limit and hence not subject it to fines from the commission.

Internal commission documents indicate that Mr. Cañete's team still harbors doubts on the German auto maker's CO(2) emissions. "The commission needs more substantiated evidence to assess the situation," according to one of the documents.

The commission wants more information on why both Volkswagen and KBA believe emissions data for 2014 and 2015 don't need to be corrected in addition to information on the number of cars that were tested and the methods used, according to the documents. The documents also say that the commission needs more details on why emissions for some 2016 models were initially understated.

A Volkswagen spokesman didn't respond to a request for comment on the commission doubts.

--Gabriele Steinhauser

STRATASYS

Board Member Levin Will Become CEO

Stratasys Ltd. said board member Ilan Levin would become chief executive after current CEO David Reis resigns later this month. Mr. Reis will remain on the board.

Stratasys makes 3-D printers and rapid-prototyping systems for both businesses and consumers. During Mr. Reis's seven-year tenure, Stratasys bought MakerBot in 2013, one of the leading consumer-focused 3-D printer companies.

Stratasys wrote down the value of MakerBot in 2015 on the combination of lower-than-expected consumer demand for the devices and a supply glut. Shares have fallen from more than $100 in 2014 to just above $20 this year.

In March, Stratasys reported that its fourth-quarter loss widened sharply, though the adjusted results and revenue decline weren't as bad as analysts feared.

Mr. Levin served as president of Objet Ltd. and vice chairman of that company's board. Objet merged with Stratasys in 2012.

Stratasys Chairman Elan Jaglom said Mr. Reis was "responsible for initiating a critical business transformation designed to support our long-term leadership in the prototyping market while expanding into applications for manufacturing."

--Austen Hufford

(END) Dow Jones Newswires

June 03, 2016 02:48 ET (06:48 GMT)

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