n" readability="49">Aug 2 (Reuters) - Oilfield services provider Hornbeck Offshore Inc's second-quarter profit missed analysts' estimates on higher operating costs and lower dayrates in its downstream segment.

Operating costs shot up 31 percent to $63.46 million.

The company, which provides offshore supply vessels to oil and gas companies, said it expects maintenance capital spending of $58.2 million and other capital expenditures of $9.4 million, for the current year.

April-June net profit was $12 million, or 33 cents per share, compared with a loss of $ 7 million, or 26 cents p er share, a year ago.

Excluding items, the company earned 35 cents per share.

Revenue jumped 63 percent to $131.6 million.

Analysts on average had expected earnings of 43 cents a share, on revenue of $132.6 million, according to Thomson Reuters I/B/E/S.

Shares of the company closed at $41.64 on Wednesday on the New York Stock Exchange.

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Australia's Reckon emerges as a stand-out performer on earnings metrics among 14 stocks in the country's information technology sector, Thomson Reuters data shows.

The data includes stocks tracked by at least three analysts.

The software firm has high score of 98 in StarMine's Analyst Revision Model and 91 in Earnings Quality model.

Five out of nine analysts have raised their EPS estimates for the year ending 2012 by 2.2 percent over the past month.

Its SmartHoldings score of 92 suggests potential increase in institutional ownership.

The stock is up 2.38 percent over the past month, while the broader index is up 3.56 percent, as of Wednesday's close.

CONTEXT:

Reckon reported a net profit of A$16.06 million for the year ended 2011, down 2.5 percent from a year ago.

A high score on StarMine's Earnings Quality model signals strong earnings sustainability over the next 12 months based on a company's past operating performance.

StarMine's Analyst Revision Model ranks stocks based on analysts' revision of earnings and revenue estimates and changes in their ratings and usually gives additional weight to analysts who have been more accurate in the past.

The StarMine SmartHoldings model is a global stock selection model that ranks stocks based on the expected future increase, or decrease in institutional ownership. (Reporting By Patturaja Murugaboopathy; Editing by Sunil Nair)

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A logo of the Blackberry maker's Research in Motion is seen on a building at the RIM Technology Park in Waterloo April 18, 2012. Picture taken April 18, 2012.

TORONTO | Thu Aug 2, 2012 9:08am EDT

TORONTO (Reuters) - Research In Motion chose its home country to launch a PlayBook tablet with built-in support for cellular networks, a crucial feature that its initial models lacked.

The BlackBerry maker said on Thursday that the new tablets will be launched in Canada next week and rolled out in coming months in the United States, Europe, South Africa, Latin America and the Caribbean.

The PlayBook tablet, launched more than a year ago, is strategically important for RIM as it is the first product to use the QNX operating system RIM will move onto a new generation of BlackBerry phones designed to compete with sexier devices already on the market.

But the PlayBook was widely criticized at launch for lacking basic features such as email, and it has failed to wow consumers despite sharply discounted pricing and a major software upgrade.

(Reporting by Euan Rocha)

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Author J.K. Rowling and her husband Neil Murray sit on Centre Court at the Wimbledon tennis championships in London June 26, 2012.

NEW YORK | Tue Jul 31, 2012 1:57pm EDT

NEW YORK (Reuters) - Author J.K. Rowling launched an online book club for young readers on Tuesday and will appear in a live global webcast in October from Edinburgh, Scotland, to speak with her fans about the magical world of Harry Potter.

Rowling's U.S. publisher, Scholastic, which developed the Harry Potter Reading Club website, said it will be a destination for fans of the British boy wizard and a tool for parents and teachers who want to set up book clubs to introduce children to the joys of reading.

"Scholastic has been in conversation with educators, librarians and other book lovers about ideas for bringing the Harry Potter books to new readers in exciting and different ways," Ellie Berger, president of Scholastic Trade, said in a statement announcing the club.

"The Harry Potter Reading Club is a direct response to that feedback and provides an entry point through which the thrill of these books can be shared with new generations of Harry Potter fans both within and beyond the classroom."

The live webcast with Rowling from her hometown will be presented by the club at noon EDT (0500 GMT) on October 11 at www.scholastic.com/hpreadingclub.

Scholastic, which described the webcast as a "live virtual author visit to classrooms," said it will be Rowling's first opportunity since 2007 to interact with young readers and to discuss Pottermore, www.pottermore.com, a website launched in April to help fans navigate through the tales of wizardry and witchcraft.

The Harry Potter Reading Club will include a guide for everything about the boy wizard, an overview of the series of Harry Potter books that have sold an estimated 450 million copies worldwide and were transformed into eight hit movies, and information about Rowling, the world's first author billionaire.

Scholastic said it will add activities on the site every month.

(Reporting by Patricia Reaney; Editing by Bob Tourtellotte and Leslie Adler)

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SAN FRANCISCO | Thu Aug 2, 2012 12:01am EDT

SAN FRANCISCO Aug 2 (Reuters) - If the millions of Olympics-related tweets flooding the Internet in recent days are a measure of Twitter's popular appeal, the company's big presence in London also signals something else: its arrival as a major player in the world of big-time brand advertising.

In sharp contrast to Google, which initially built its businesses mostly by persuading thousands of small companies to buy "direct response" ads, Twitter's emerging strategy focuses on selling elaborate brand campaigns to major marketers such as Procter & Gamble Co and Verizon Communications .

The Olympics have presented a prime opportunity for Twitter to position itself as a new media channel that complements TV broadcasts - and carries the big-name ads to match.

"We can service the very biggest brands in the marketplace," Adam Bain, the company's president of revenue and key advertising strategist, said in a recent interview. "The conversation that's happening on TV, or happening live is also happening on Twitter. That's very valuable."

Courting major brands is an unusual play for a six-year-old company that private investors value at more than $8 billion but has yet to prove its financial viability. It often takes years to persuade the biggest advertisers to try a new publication or TV show, much less a completely new medium that requires a different creative approach.

The challenge is evident in Facebook's fitful efforts to woo marketers such as General Motors, which jolted the social network by pulling back from paid ads just before Facebook's IPO in May.

GM and Facebook are now talking again, and Facebook recently began a boot camp at its Menlo Park campus where marketers can meet with engineers to collaborate on ad campaigns. But as of 2011, brand campaigns still accounted for less than 40 percent of Facebook's $3.7 billion in revenue, according to estimates by eMarketer.

Even Google, which revolutionized direct response ads by showing them next to search results and has reaped huge profits in the process, has not fully cracked the code when it comes to big brands.

But the advertising giants say their early experiments with Twitter have shown remarkable results.

Consider the case of PepsiCo, which spent $640 million in 2011 on marketing, according to Kantar Media. Beginning late last year, about a dozen Twitter staffers led by Bain flew to PepsiCo's offices in Purchase, New York, for a series of brainstorming sessions.

Armed with data gleaned from Twitter chatter, the two companies drew up a plan to use Twitter as a centerpiece for a massive rebranding campaign, "Live for Now," that tied the soft drink to pop music stars and played up its youth appeal.

As the campaign unfurled in June, Pepsi rolled out a series of music videos on its Twitter page based on which artists were most discussed on Twitter, and doled out downloads for hit songs. In late June, Pepsi threw a Katy Perry concert in Hollywood that was live-streamed within a tweet on Pepsi's Twitter page.

The company also paid Twitter to boost the reach of select "promoted tweets," which garnered 68 million impressions in one day.

About 24 percent of users who saw Pepsi's paid tweets clicked, replied to or helped broadcast the tweets - a rate that deeply impressed Pepsi.

"We saw some phenomenal results with those ad products," said Shiv Singh, the global head of digital marketing for Pepsi Beverages. Singh said it was "extremely likely" that Pepsi will ramp up its spending on Twitter.

WHERE THE BIG DOLLARS LIE

Twitter's focus on brand marketing, which aims to create a positive association with a product rather than prompt an immediate purchase, underscores a long-standing issue in the online advertising world.

About 60 percent of the total $150 billion spent on advertising in 2010 went toward brand marketing campaigns, according to comScore. But in the online world, the vast majority of the roughly $30 billion in ad spending went toward direct response ads that generate leads or drive sales directly.

Google's search ads are the dominant form of online direct-response advertising, but traditional banner ads are also often judged on how many people click through and take action.

"The biggest bucket that's untapped in digital advertising is brand marketing," said Jonah Goodhart, the founder of advertising technology company Moat Inc.

What may enable Twitter to tap that bucket is its growing "second-screen" appeal. The Olympics deal with NBC is aimed at offering Twitter denizens tweets from athletes and other content that complement the TV broadcasts. Procter & Gamble, for one, has straddled the two media during the Olympics, using promoted tweets to solicit feedback about a TV ad shortly after it runs on NBC.

Meanwhile, Twitter has struck a similar deal with NASCAR, while Twitter's Hollywood liaisons are pushing TV studios to create Twitter apps that accompany popular shows.

"If you have a service that naturally lends itself to being at the center of big media-event conversations, you go where the big money is," said John Battelle, founder of Federated Media Publishing, an online ad network.

At the center of Twitter's ad push has been Bain, a 38-year- old advertising and sales executive who rose through the ranks at News Corp beginning in 1999 and was eventually tapped to build an advertising network across all of News Corp's digital properties, including MySpace.

Although MySpace faded amid competition from Facebook, Bain emerged with his reputation burnished and a deep Rolodex of Madison Avenue contacts.

"His singular strength was that he's the perfect combination of a salesman and a tech person," said Peter Chernin, the Hollywood film producer and the longtime No. 2 at News Corp. "The people who build technical products, usually none of them can sell."

Bain has built a sales team that now accounts for nearly a quarter of Twitter's roughly 1,000 employees. Rows of MacBook-toting advertising employees now occupy a swathe of the seventh floor in Twitter's hulking new office building on San Francisco's Market Street.

They are also dispersed in locations like Atlanta and Austin, where staffers watch over major accounts like Coca-Cola and Dell Inc. Earlier this year, the company poached Shailesh Rao, who formerly oversaw Google's Asia-Pacific business, to court overseas advertisers.

Bain also hired Joel Lunenfeld, an interactive advertising executive from Atlanta, to oversee creative and engineering teams who actively pitch ideas to Fortune 100 companies.

"Adam and Dick have been consistent and open about what works on Twitter and what doesn't," said Noah Mallin, vice president of social marketing at Digitas. "Advertisers trust them. That really goes a long way."

Twitter's transition from quirky tech start-up to glitzy media power has alienated some of its long-time fans in the tech world who would like the company to function more as a platform for independently developed social media services.

Its Olympic journey has had some bumps as well. The company came under fire again this week for banning a British journalist who was critical of NBC and tweeted an executive's email address, leading commentators to question whether Twitter compromised its values to side with a business partner. Twitter later apologized and reinstated the account.

But from an advertising standpoint, Twitter's priorities were perhaps most clearly displayed at a recent European event: the annual Cannes Lions advertising festival.

A massive banner hung over the festival's main event hall, featuring the company's blue bird logo and the hashtag: "#CannesLions," Bain said.

The message to marketers was that all the festival's chatter was "also happening on Twitter."

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Chinese dissident artist Ai Weiwei pulls up his shirt bearing a portrait of himself as he chats with journalists at the courtyard of his studio before his verdict hearing in Beijing, July 20, 2012.

LOS ANGELES | Tue Jul 31, 2012 4:09pm EDT

LOS ANGELES (Reuters) - Artist Ai Weiwei has made headlines worldwide since his detention in China last year, but outside art circles few people in western countries such as the United States know of his efforts to push for a more open government in his country.

As an artist, he is an eclectic talent who draws, paints, sculpts and does conceptual art, photography, cultural criticism and architecture.

Now, a film documentary, "Ai Weiwei: Never Sorry" sheds light on the man behind the dissident artist, with a goal that U.S. and other audiences might learn more about Chinese culture and, perhaps, about themselves.

Ai, 54, disappeared in his country in April 2011, and after an outcry by art lovers, free speech activists and politicians, he was found to have been jailed by Chinese officials.

He was released after 81 days in detention, and this month, a Chinese court upheld a $2.4 million tax evasion fine against him that is largely considered a way to muzzle his voice.

Those are the headlines, but who is the man?

"For me, that was one of the driving questions. Who is this guy?," Alison Klayman, the filmmaker of "Ai Weiwei: Never Sorry," now playing in U.S. theaters, told Reuters.

"I really feel like what I found, and what is reflected in 'Never Sorry,' is someone who is...an incredibly effective communicator, a political organizer, a social commentator. But above all, he is an artist, and an artist who is motivated by the desire to push his country forward," Klayman said.

Klayman first met Ai while living in China and working for National Public Radio, PBS show "Frontline" and other US media outlets. She had been asked to tape an interview with Ai following his role as artistic consultant for the 2008 Beijing Olympic stadium, dubbed the Bird's Nest for its striking design.

While Ai's work on the Bird's Nest vaulted him to worldwide fame, he was already well-known in China for his art, design, activism and family. His father is Chinese poet Ai Qing, and after spending the 1980s studying in the United States, Ai Weiwei returned to China to be with his dad, who died in 1996.

In the 1990s, Ai Weiwei published a series of underground books about young and emerging artists who were bucking convention. In the 2000s, he challenged official China's version of life behind the Great Wall with, among other work, paintings that showed a hand giving the middle finger to images symbolizing Chinese authority such as Tiananmen Square.

In 2007, he denounced the Bird's Nest and the Beijing Olympics as political propaganda, and in 2008, Ai began work to expose the names of more than 5,000 children killed in a massive earthquake -- names the government did not want disclosed.

SPEECH IS FREE

"The question: 'Why is he not in jail?' was one that I asked pretty much all of my interviewees, certainly all the ones that were done before his (2011) detention," Klayman said. "Actually, it's something that I asked Weiwei within the first week or two of us filming together...And his response was, 'I don't know...It's not up to me whether I'm in jail or not.'"

Ai's answer is simple and complex at the same time because it requires understanding societal shifts in modern China, and his life and work seem a fitting vehicle to explore the country's changing cultural landscape.

What emerges in "Never Sorry" is a portrait of a man who deeply loves his country and fellow citizens, yet also wants to expose his government's suppression of individual rights.

Following his work on the Bird's Nest, Ai exploded onto the international art scene, but it was his use of Twitter that gave his voice even wider reach around the globe and earned the wrath of Chinese officials who'd already shut down his personal blog.

"Weiwei was talking about all of the exciting possibilities of the Internet well before the Arab Spring and Wikileaks and all these things in current affairs," said Klayman.

Yet, as much as "Never Sorry" paints a portrait of an artist and sheds some light on Chinese life, Klayman also hopes it challenges western audiences to express themselves without fear of retribution, whether by family, friends or governments.

"It really makes people inspired to think, 'What can I do in my world, and where do I need to put it out there, put it on the line, risk something to make my world a better place," she said.

(Additional reporting by Alicia Avila; Editing by Cynthia Osterman)

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1 of 7. An Afghan National Army soldier keeps watch near the site of an incident in Kabul August 2, 2012.

KABUL | Thu Aug 2, 2012 8:26am EDT

KABUL (Reuters) - Afghan security forces killed five insurgents and wounded one during a pre-dawn raid in Kabul on Thursday, with authorities saying they had thwarted a mass attack and captured intelligence pointing to the militant Haqqani network.

Soldiers from Afghanistan's spy agency, the National Directorate of Security (NDS), launched the raid just after midnight, entering a single-story house compound on the fringes of Kabul which the insurgents were using as a base.

"They planned mass attacks in different parts of Kabul disguised in burqas," the NDS said in a statement, referring to the head-to-toe covering worn by many Afghan women and sometimes used by insurgents to evade detection.

Police said two insurgents escaped during a gun battle that raged for five hours around the isolated compound, where the insurgents had been amassing weapons in a newly built brick house.

The militants had three vehicles loaded with explosives and suicide-bomb vests, as well as large stores of rocket-propelled grenades and automatic weapons, and planned to occupy a high-rise building to attack the city's business heart.

The Taliban issued a statement denying that Thursday's operation had targeted their fighters, although the insurgents often play down their defeats and inflate successes.

The NDS said target maps and telephone numbers recovered from the compound had numbers for the Haqqani network based outside Afghanistan.

Haqqani network militants, allied with the Taliban and largely based in northwest Pakistan's lawless border lands, have been blamed by NATO-led forces in Afghanistan for several high profile attacks in recent months.

Dozens of militants launched a coordinated assault in central Kabul on April 15, occupying a high-rise construction site and pounding the city's diplomatic and government centre with rocket-propelled grenades and small-arms fire in an attack that took 18 hours to quell.

On June 22, Afghan security forces backed by foreign advisers fought a day-long battle with insurgents after a Taliban attack on a lakeside hotel on Kabul's outskirts.

But security forces and NATO-led foreign troops say the sporadic attacks do not point to weaknesses in Afghan forces and intelligence ahead of a withdrawal by most foreign combat troops to be completed by 2014.

"PROGRESS"

The United States is pressing Pakistan to step up its efforts to root out militants, in particular the Haqqanis.

Pakistan has strong traditional links with the Afghan Taliban and other militant groups but it denies accusations it uses them as proxies to gain leverage in Afghanistan ahead of any settlement to the war, or in case a civil war breaks out after foreign troops leave.

Pakistan has also long complained that the United States has overlooked its contribution to the fight against militants.

NATO's top commander in Afghanistan, U.S. General John Allen, met Pakistani counterparts in Islamabad on Thursday to discuss cross border security in the wake of hundreds of rocket attacks in eastern Afghanistan which Afghan officials have blamed on the Pakistan army.

Pakistan has denied the accusation.

"We are making significant progress toward building a partnership that is enduring, strategic, carefully defined, and that enhances the security and prosperity of the region," Allen said in a statement after his talks.

The NATO-led force in Afghanistan has acknowledged an 11 percent spike in attacks over the past three months since the start of the summer fighting period, although overall the number of foreign soldiers killed is down on last year.

Eighty-five were killed in June and July against 119 over the same period last year.

(Writing by Rob Taylor; Editing by Robert Birsel)

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Conference attendees cross a street in San Francisco, California March 15, 2012.

WASHINGTON | Thu Aug 2, 2012 10:42am EDT

WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits rose less than expected last week, but the data continues to be influenced by distortions from seasonal auto shutdowns.

Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 365,000, the Labor Department said on Thursday. The prior week's figure was revised up to 357,000 from the previously reported 353,000.

"The claims number is not that bad. There does seem to be some difficulty dealing with the seasonals this time of year whether it's auto plant closures or lack thereof," said Cary Leahey, a senior economist at Decision Economics in New York.

Economists polled by Reuters had forecast claims rising to 370,000 last week. The four-week moving average for new claims, a better measure of labor market trends, fell 2,750 to 365,500, the lowest in four months.

Temporary plant shutdowns by automakers for annual retooling cause wide swings in claims data in July, which makes it difficult to get a clear picture of the labor market's health.

The model used by the government to smooth the numbers for typical seasonal patterns has trouble anticipating the timing of the temporary closures and in addition, some automakers kept production lines running in July.

A Labor Department official said last week was the last where the seasonal expectation was shaped by seasonal layoffs in the auto manufacturing sector.

U.S. financial markets were little moved by the data, with traders focusing attention on a press conference by European Central Bank President Mario Draghi.

The claims data has no bearing on the July employment report as it falls outside the survey period.

The government is expected to report on Friday that employers added 100,000 new workers to their payrolls last month, according to a Reuters survey, up from 80,000 in June.

Job growth averaged 75,000 per month in the second quarter, a sharp deceleration from the average monthly increase of 226,000 in the first three months of the year.

An uncertain fiscal policy path and ongoing debt problems in Europe have hurt demand and left businesses cautious about hiring new workers.

On Wednesday, the Federal Reserve signaled it was willing to ease monetary policy further, noting that economic activity had slowed in the first half of the year. Many economists expect the U.S. central bank to launch a third round of bond buying, also known as quantitative easing, in September.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 19,000 to 3.3 million in the week ended July 21.

A second report showed planned layoffs at U.S. companies dropped for a second straight month in July, even as job cuts in the financial sector persisted.

Employers announced 36,855 planned job cuts last month, down 1.9 percent from June, consultants Challenger, Gray & Christmas said. So far this year, announced layoffs are up 2.5 percent from the same period in 2011.

The financial sector cut 6,156 jobs in July, the largest number since January.

"The situation in Europe is far from being resolved and ongoing weakness here could continue to take a toll on the financial sector," John Challenger, chief executive of the company, said in a statement.

Challenger also cautioned that layoffs typically slow during the summer months, while the heaviest job cuts historically happen in the fourth quarter.

"This may simply be the lull before the storm," he said.

(Reporting By Lucia Mutikani, additional reporting by Leah Schnurr and Ellen Freilich in New York; Editing by Andrea Ricci)

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TOKYO | Thu Aug 2, 2012 2:09am EDT

TOKYO Aug 2 (Reuters) - Sharp Corp, which posted its worst net loss in a century in the last financial year, reported a first-quarter loss as waning TV demand and an overcapacity at its main liquid crystal display plant continued to weigh on earnings.

In the three months to June 30, Sharp swung to an operating loss of 94.1 billion yen ($1.20 billion) from a 3.5 billion-yen profit a year earlier. That was deeper than the average 44.4 billion-yen loss estimated by five analysts surveyed by Thomson Reuters I/B/E/S.

The manufacturer of Aquos TVs also slashed its forecast to a full-year operating loss of 100 billion yen, from its earlier estimate for an operating profit of 20 billion yen. That compares with the average estimate for an operating loss of 18.2 billion yen in a poll of 16 analysts surveyed by Thomson Reuters since the company released its full year results in May.

Sharp is considering its first major layoffs that a source familiar with the matter told Reuters could be as many as 5,000 people.

The company in March also agreed to sell a 46.48 stake in its Sakai LCD plant to Taiwan's Hon Hai Precision Industries , part of the Foxconn Group, in a bid to isolate itself from the losses at the facility in western Japan.

Hon Hai, a major supplier to Apple Inc, is purchasing new shares in Sharp worth 66.9 billion yen, giving it an 11 percent stake in Japan's last major fabricator of LCD panels for TVs.

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NEW YORK | Thu Aug 2, 2012 8:23am EDT

NEW YORK Aug 2 (Reuters) - Cisco Systems Inc said on Thursday it had given board seats to Marc Benioff, head of salesforce.com, and Kristina Johnson, former U.S. under secretary of energy.

Cisco said the appointments were effective Aug. 1. Its board now consists of 14 directors.

Benioff, 47, co-founded web-based software provider salesforce.com in 1999. Johnson, 55, currently serves as chief executive of Enduring Hydro LLC, a clean energy development and consulting company.

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HAVANA | Wed Aug 1, 2012 6:28pm EDT

HAVANA (Reuters) - The Cuban government has closed a privately run cultural center, causing consternation among artists and intellectuals in what is shaping up to be the latest test of President Raul Castro's loosening of controls over everyday life.

A week ago government inspectors burst into the El Cabildo cultural center to the shock of patrons, artists and staff attending musical performed by its theater company, the "Opera in the Street."

The local authorities, citing a recent Reuters story on the center that mentioned a cover charge for customers, took away El Cabildo's license on the grounds of "illicit enrichment."

The vast majority of El Cabildo's clients were Cuban, paying a 50-peso cover charge, the equivalent of $2, while foreigners paid more.

The inspectors searched El Cabildo for hours and interrogated its young artists and restaurant staff, but found nothing more amiss than two cooks working on a trial basis without proper papers, employees said.

A protest letter circulating among members of Cuba's National Union of Artists and Writers, and written by owner Ulises Aquino, defends the cultural center against the enrichment charges and instead turns the tables on unnamed bureaucrats.

"The poet says: 'who questions the honorable, clearly signals that he is not,' and a proverb says, 'The thief thinks that everyone is the same as he,'" Aquino's letter said.

Officials at the Cuban government's press office did not immediately respond to a request seeking an official explanation for El Cabildo's closure.

STATE BUREAUCRATS UNDER ATTACK

For many within Cuba's cultural and intellectual circles, the cultural center's fate has become a litmus test of efforts by Castro to grow the state's small private sector while drastically reducing the state bureaucracy.

Since taking over for his ailing older brother Fidel in 2008, Raul Castro, 81, has liberalized regulations for small businesses and farming, and begun leasing small state retail outlets to employees.

Aquino, a 50-year-old opera singer, founded the theater company Opera in the Street in 2006, and taking advantage of loosened regulations on small business and government encouragement of local development projects, opened El Cabildo as a permanent venue for the youthful troupe.

A staunch advocate of socialism, Aquino charged in his letter that the forces behind the closing of his center were "jealous" of its success.

"Those who fear that the worker, the intellectual and the artist might find their own productive road are not revolutionaries, they are conservatives," he wrote.

"They enjoy the benefits of power that gives them the ability, as in this case, to decide the destiny of human works, not to help them flourish, but to destroy them," Aquino charged.

The Reuters story characterized El Cabildo as "perhaps the largest private business in Havana," with the Opera of the Street's 86 artists and support staff, plus 43 other employees in its bar and restaurant.

After the article appeared, the Communist Party's Ideology Department phoned Aquino to ask how El Cabildo worked.

Aquino told reporters that he provided a full explanation and believed all was well, only to be raided by a "commando" of inspectors later in the week.

BUILT FROM SCRATCH

Aquino, a stocky, barrel-chested man who has a powerful baritone voice onstage but speaks softly when he is off, built from scratch the eclectic theater company that mixes traditional opera with Cuban song and dance and popular music from abroad.

He also built the cultural center, investing his savings earned abroad as an opera singer, on the ruins of a collapsed building in Playa, one of Havana's relatively well off districts.

Reuters also had reported that El Cabildo's proceeds were shared after expenses, taxes, and investments, resulting in monthly wages four times greater than the country's 450 pesos average, or around $19.

"The earnings of the Opera of the Street are divided among everyone ... including me ... All the artists perform with a subsidy from the Culture Ministry, but as our president has said, salaries do not correspond with the cost of living," Aquino said in his letter.

A government insider said the Playa district's architect and perhaps other officials were opposed to the El Cabildo for various reasons and had apparently used the Reuters story as an excuse to shut it down.

A Cuban economist said El Cabildo's cover charge may have fallen into a gray area in Cuban law. Though private establishments were not prohibited from having cover charges, establishments associated with the Culture Ministry, such as such as El Cabildo, might be more restricted in what they can charge.

(Editing by David Adams)

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A woman in a wheelchair passes the shop window of a clothing store in Pontevedra, northern Spain, June 29, 2012.

FRANKFURT/BERLIN | Thu Aug 2, 2012 6:18am EDT

FRANKFURT/BERLIN (Reuters) - The United States raised the pressure on euro zone leaders to take decisive action on solving the region's debt crisis, notably by lowering troubled members' borrowing costs, on the eve of a crucial European Central Bank meeting.

President Barack Obama said he welcomed recent declarations by European leaders and the ECB on the need to do whatever is necessary to preserve the euro.

U.S. Treasury Secretary Timothy Geithner had a blunter message for the euro zone, saying it must take steps including "bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need".

Obama, in a telephone call with French President Francois Hollande on Wednesday, "encouraged their efforts to take decisive action", the White House said.

Hollande reassured Obama that European Union member states aimed to enact soon the decisions taken at a summit in late June, according to the French leader's office.

Germany, whose voters are deeply hostile to funding bailouts of the euro zone's weakest members, agreed in principle at the summit that the bloc's rescue funds could buy bonds of countries that are struggling to borrow on international markets.

Geither made his more forthright comments in an interview with Bloomberg Television recorded on Tuesday, a day after he flew to Germany to meet Finance Minister Wolfgang Schaeuble and ECB President Mario Draghi.

Italy and Spain, the euro zone's third and fourth largest economies, are struggling to fund their budget deficits and debt obligations at affordable levels as bond market investors take fright.

Draghi's promise last week to do whatever it takes to preserve the euro, within the ECB's mandate, stirred speculation that its Governing Council might take more radical steps at a monthly policy meeting on Thursday.

"BOLD AND APPROPRIATE"

Italian Prime Minister Mario Monti said Draghi's promise was "bold and appropriate", and said European leaders were weighing joint intervention by the ECB and the euro zone's rescue funds.

He predicted that the future permanent rescue fund, the European Stability Mechanism (ESM), would "in due course" be granted a banking licence so it could tap ECB funds to buy almost unlimited amounts of bonds despite German opposition.

Market expectations of a major ECB move this week have faded somewhat. Those traders and investors who expect action on Thursday would sell the euro and European shares, and drive up Spanish and Italian bond yields if the ECB sits on its hands.

Geithner said Schaeuble and Draghi had told him of plans they were making on tackling the crisis, but he cautioned against expecting immediate action.

Past crises showed that the longer it took to address the issues, the more they cost. "I believe they understand that. That's why they've signalled they are prepared to move further. Now again, this is going to take time," Geithner added.

German Vice-Chancellor Philipp Roesler rejected pressure for the ECB to step in and cap the borrowing costs of countries in trouble, saying the central bank should stick to fighting inflation and not ease market incentives for reform.

"If you take away the interest rate pressure on individual states, you also take away the pressure on them to reform," Roesler, economy minister and leader of the Free Democrats, junior partners in Chancellor Angela Merkel's centre-right coalition, told reporters in Berlin.

He also reasserted Germany's firm opposition to letting the ESM borrow from the central bank, calling this "the road to an inflation union".

Nick Parsons, head of markets strategy at nabCapital in London, said the euro could fall a couple of U.S. cents from current levels, while bond market analysts expect Spanish yields to reach new euro-era highs if the ECB does not act.

At the heart of the crisis, Greek political leaders said on Wednesday they had reached agreement on 11.5 billion euros of austerity cuts demanded by the country's lenders. Failure to agree the cuts threatened a sequence of events that could have led to Greece's exit from the single currency.

The head of one of its lenders, Christine Lagarde at the International Monetary Fund, promised to stand by the country and "never leave the negotiating table", while calling on its leaders to do more with structural reforms and by improving tax collection.

She also warned that uncertainty over the future of the euro zone was clouding the horizon for the Spanish economy.

MONTI ON TOUR

Monti, who is touring Europe to press for action to bring down Rome's borrowing costs, made his pitch to euro zone hardliner Finland on Wednesday, saying Italy did not need an assistance programme but might in future need "a breathing break" from high interest rates.

"We have in mind a possible intervention through EFSF, ESM and the ECB," Monti was quoted as saying by Finnish daily Helsingin Sanomat before he met Prime Minister Jyrki Katainen.

Central bank sources have told Reuters that intervention could be at least five weeks away because Draghi's comments had not been agreed in advance with the Governing Council, and other elements must first fall into place.

The sources said the ECB could revive its mothballed programme of buying the bonds of troubled governments along with the rescue funds, but Spain would first have to request assistance, which it has resisted so far.

Credit ratings agency Standard & Poor's affirmed Spain's sovereign BBB+/A-2 rating on Wednesday, citing its commitment to economic and fiscal adjustments, but warned it risks losing investment grade if euro zone support fails to boost confidence.

Euro zone leaders would have to agree to the rescue funds buying up government bonds, and the German Constitutional Court would have to uphold the legality of the bloc's permanent rescue fund in a ruling due on September 12.

The leaders have spent the past week issuing statements promising to take whatever steps are necessary to rescue the currency, but none has raised expectations as high as Draghi, who heads the only federal European institution able to act swiftly and decisively.

However, the ECB is divided, with Germany's Bundesbank opposed to reviving government bonds or giving the euro zone rescue fund a banking licence.

Draghi met Bundesbank chief Jens Weidmann privately earlier on Monday to try to reconcile differences on what action the bank might take. Neither bank would comment on the meeting.

The Bundesbank released on Wednesday a June 29 interview for an in-house publication in which Weidmann said governments expected too much from the central bank, and what they wanted did not always make economic sense.

"Politicians overestimate the central bank's capacity and place too many demands of it," he said. "Whether it's about interest rates or any sort of special measures, in the end it always comes down to the same thing: trying to rope the central bank into meeting fiscal policy objectives.

Weidmann said the Bundesbank would continue to defend its positions firmly "so that the (European) monetary union remains a stability union".

With the economy slowing and inflation under control, other options on the ECB's radar screen include a possible further cut in interest rates and a further loosening of rules on the collateral it will accept to lend funds to banks.

(Additional reporting by Terhi Kinnunen in Helsinki, Swaha Pattanaik and Richard Hubbard in London, Eva Kuehnen in Frankfurt and Margaret Chadbourn in Washington; Writing by Paul Taylor; editing by Will Waterman and David Stamp)

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TOKYO | Thu Aug 2, 2012 2:14am EDT

TOKYO Aug 2 (Reuters) - Sony Corp said first-quarter operating profit slid from a year earlier as the iconic consumer electronics brand continued to struggle with weak demand for its TVs and other devices amid biting competition from foreign rivals.

In the three months to June 30, Sony posted a 77 percent fall in operating profit to 6.28 billion yen ($80.27 million), well below the average 17.6 billion yen profit estimated by 5 analysts surveyed by Thomson Reuters I/B/E/S.

The three-month performance gives investors their first marker on the performance of Sony's new boss, Kazuo Hirai. He took the helm of the inventor of the Walkman music player in April, vowing to turnaround the struggling company by spurring profit growth from cameras, gaming and mobile devices.

Following a 67 billion yen loss in the previous business year, Sony lowered i ts full-year operating profit forecast to 130 billion yen compared with a consensus estimate of 139 billion yen of 18 analysts surveyed by Thomson Reuters.

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