Sales of kid's clothing and jeans helped a slimmer Gap (GPS) deliver its best third-quarter results in this decade. Now, management says it's going after market share, even in this tough market.
The parent of The Gap, Old Navy and Banana Republic posted net income of $307 million, up 25% over a year ago with the 44 cents per share in earnings hitting analysts' target for the period. Executives said the company reaped its best third-quarter operating profit in 10 years by increasing its profit margins through tweaking its merchandise mix and controlling costs.
It seems airlines will stoop to anything in their pursuit of saving or making money. Long gone are the days of free food on bargain flights. Be prepared to pay to check even one bag. As if those skinflint ideas weren't enough, AirTran Airways (AAI) is placing ads on the backs of tray tables where travelers can't help but see them during takeoff and landing, as yet another way to haul in more revenue.
As annoying, however, is that the discount carrier is actually "pleased to be able to offer exclusive deals and other promotions to our customers through this unique medium," said Tad Hutcheson, AirTran vice president of marketing and sales, in announcing the program Wednesday. The ads will appear in all 138 of the company's Boeing (BA) jets.
Dell (DELL) said Thursday that its net income dropped 54% in the latest quarter amid signs the company isn't fully benefiting from the computer industry's fledgling recovery. Dell's numbers missed Wall Street's forecasts, and the shares fell almost 6% in extended trading.
In the last quarter, Dell lost its ranking as the world's No. 2 personal computer maker, a slot now held by Taiwan's Acer Inc. Dell rivals such as Acer and Hewlett-Packard (HPQ) have stolen market share in part by exploiting their bigger presence in retail stores. That has been a big weapon because consumer interest in little laptops called "netbooks" has helped the PC industry start to pull out of its worst slump in years.
As New York City copes with knowing it will soon host the trial of Khalid Sheikh Mohammed, mastermind of the September 11 terror attacks, there is growing concern about the security of the city and its inhabitants.
The towering prison where Mohammed will be held, and the courtroom where he will be tried, are a short walk from the site of the Twin Towers. It doesn't take Nostradamus to see how the combination of a prominent location, a showy trial, and a bustling city could have terrorists licking their lips.
Stocks fell sharply Thursday after a sector downgrade and an overseas sell-off caused skittish investors to grow concerned that the rally has outpaced the potential for future earnings growth.
The blue-chip Dow Jones Industrial Average ($INDU) dropped 93 points, or 0.9%, to 10,334. The broader S&P 500 ($INX) fell 14 points, or 1.3%, to 1,096, while the tech-heavy Nasdaq Composite ($COMPX) shed 36 points, or 1.7%, to finish at 2,157.
Every news organization makes mistakes. But when Fox News makes mistakes, they seem to tilt in a suspiciously consistent direction, favoring Republicans and conservatives over Democrats and liberals.
It happened again Wednesday, when host Gregg Jarrett, introducing a segment on Happening Now, described the "huge crowds" that were turning out to greet Sarah Palin on the promotional tour for her book, Going Rogue. "These are some of the pictures just coming into us," Jarrett said as images of Palin surrounded by throngs of supporters flashed across the screen.
Google (GOOG) likes to blow up entire industries. Two weeks ago, the search giant dropped a bomb on the GPS industry with the release of its free and open-source voice-activated navigation app -- sorry, Garmin (GRMN) and TomTom. Google is also in the process of blowing up the productivity applications business with its Google Apps offering, a suite of online email, word processing and other tools that costs a fraction of the price of Windows Office and other Microsoft (MSFT) software.
Today, Google's new Chrome browser-based OS came into clearer focus, and from the looks of it, Google may be en route to blowing up a handful of other businesses.
AstraZeneca (AZN) has had a good week with its anticlotting drug Brilinta (ticagrelor). It impressed many observers by announcing positive results of a late-stage head-to-head study and a mid-stage study for Brilinta, and on Thursday, it said it had filed for Food and Drug Administration approval. Brilinta could be on the way to becoming a megablockbuster drug.
Study results for the experimental drug -- which fights acute coronary syndrome -- were first presented Sunday. For the study's 8,430 sickest patients, those taking the drug suffered fewer serious cardiovascular events (or deaths) than those taking Plavix, from Bristol-Myers Squibb (BMY) and Sanofi-Aventis (SNY).
A major tax increase on loose cigarette tobacco has caused pipe tobacco sales to surge dramatically this year. Historically, the tobacco industry manufactured around 270,000 pounds of pipe tobacco per month. Yet, in April, it hit 566,000 pounds, ultimately skyrocketing to 1.7 million pounds in August. While pipe smoking has risen somewhat in popularity since the recession began, mostly because it's a less expensive alternative to cigars, that dynamic is but a rounding error in the spectacular growth seen this year. So, what's behind the pipe tobacco explosion? The real answer lies in another question: What's in a name?
In April, the tax on loose cigarette tobacco -- used to roll your own -- went from $1.10 a pound to $24.78. In response, manufacturers switched from selling cigarette filler to the pipe market. Many roll-your-own cigarette tobacco makers simply relabeled their products as pipe tobacco, which is taxed at a mere $2.83 per pound. Other brands, such as Criss Cross and Farmer's Gold, replaced their original products with pipe tobacco varieties. The cuts aren't exactly the same, but the tobacco will still work in rolling papers for those inclined to use it that way.
The manufacturers call the changes a matter of survival, saying the tax hike jeopardizes their ability to stay in business. But, anti-smoking groups see it as a ploy to beat the system ... and a tentative step onto a slippery slope.
Facebook looks like its worth close to $10 billion right now, based on actual transactions in the stock. The social networking site has seen its shares surge on an exchange for private companies, suggesting that the company is perceived to be headed in the right direction. Of course, private companies don't have to disclose all their dirty laundry, so assume that the current "market" value is based on only the rosiest of impressions. Some see this as a leading indicator of a Facebook IPO, which is bound to ignite unparalleled excitement.
There's room for a little common sense, though, and investors should take advantage of it. Facebook remains down 33% from its 2007 peak value of $15 billion, and the recent trading activity implies a value slightly below that defined by the latest investment in the company. It probably makes sense to keep the corks in the champagne bottles a little bit longer, but only because the vintage isn't quite right yet.
I recently wrote about my latest plan for averting financial disaster by selling one of the two vital organs currently processing urine and regulating electrolytes and homeostatic function on each side of my abdomen. After all, in these times, we all need to find ways to cut back. Of course, I wasn't entirely serious about the idea, although by the end of my conversation with Dr. Sally Satel, herself the recipient of a donated kidney and a leading expert on the flaws in the country's organ donor system, I was definitely giving the idea more thought. Satel and I surmised from several recent news events that many more white-collar unemployed might be feeling the same way, if they hadn't hocked a kidney already.
Well, we're no longer surmising. Despite the five-year prison sentence that such a transaction could carry should the authorities catch wind of it, more than two dozen readers wrote in brazenly offering a spare kidney for sale. Prices ranged from $250,000 down to one offer of "$65,000.00 cash! plus all expenses -- I'd hop on the table so fast."
Shoppers are looking for more casual pajamas, antibacterial toiletries and moderately priced underwear, executives at Limited Brands (LTD) say. The parent company of the Victoria's Secret and Bath & Body Works chains posted better than expected results in the third quarter and upgraded its forecast for the rest of the year, thanks to cost-cutting and improved sales of some products.
Limited Brands' net income was $6.1 million, after factoring out some gains from tax adjustments, compared to $4.2 million the same time last year. That translates into a gain of two cents per share; analysts had forecast a one-cent loss.
It's rarely much fun to watch government officials testify before Congress. But Rep. Kevin Brady (R-Texas) managed to add a charge to a hearing held Thursday morning by the Joint Economic Committee when he told Treasury Secretary Timothy Geithner that bailouts and rising unemployment had eroded lawmakers' and taxpayers' confidence in him. He then asked him to resign.
"Mr. Secretary, you are the point person on the economy, and the buck, in effect, stops with you," Brady said. "For the sake of our jobs, will you step down from your post?"
Now, that seems to be exactly what is happening. AT&T (T) reported on Tuesday that it had spent $65 million upgrading its wireless network in San Francisco since 2008. The phone company said it upgraded about 850 cell sites because of the rising demand put on its network since the iPhone started selling two years ago. That's good news to many iPhone users, whose phone has become synonymous with "dropped calls."
The ongoing battle for internet bookselling heated up on Thursday.Walmart (WMT) CEO Raul Vasquez is trash-talking Amazon (AMZN) CEO Jeff Bezos (pictured),according to the New York Post: "If there's going to be a Walmart on the Web," Vasquez said, "it's going to be Walmart.com."
Oooh -- it's on.
The comment is the latest salvo in this fall's highly publicized pricing war between the titans. In October, Walmart.com dropped the price of 10 bestselling books to $10. Amazon followed suit; Walmart countered with $9, and Amazon followed. Walmart downed the ante to $8.99, and Amazon backed off -- only to see Target.com match Walmart.com, which ducked down to $8.98. Vasquez sums up his company's pricing strategy: "If they react and match our prices, we're going to continue to lower our prices."
The AAA projects that 38.4 million people will travel more than 50 miles from home over the Thanksgiving holiday next week. That is not up much from last year -- only 1.4%. But at least it is up. With a slow economy, high unemployment and oil at $80 a barrel, it would not have been shocking for the group to forecast a drop.
Broken down by mode of transportation, the AAA projects: "The number of travelers by automobile is expected to be 33.2 million in 2009 compared to 32.5 million last year; an increase of 2.1%. The number of travelers by air is expected be 2.3 million compared to 2.5 million in 2008; a decline of 6.7%." The drop in air travel is probably an indication that people are still watching what they spend carefully. The decline is despite the fact that the AAA expects the cost of airline tickets and hotel rooms to drop.
Morgan Stanley (MS) CEO John Mack just loves regulators -- can't get enough of them.
Speaking Wednesday at a conference sponsored by Bloomberg News and Vanity Fair, Mack seemed to wish more regulators were camped out in his New York-based firm, watching its every move. He'd better hope that the Business Roundtable and the U.S. Chamber of Commerce don't get wind of his heresy. And the anti-regulation crowd at the libertarian Cato Institute is probably none too happy with him, either.
The Index of Leading Economic Indicators increased 0.3% in October -- its seventh straight monthly increase -- the Conference Board announced Thursday, providing more evidence that the U.S. economic recovery is progressing.
Economists surveyed by Bloomberg News had expected the index to rise 0.4% in October. The index rose a revised 1.0% in September, 0.4% in August, and 1.0% in July. The LEI index now stands at 103.8. (Base year, 2004 =100.)
Jobless workers who saw the clock ticking on their unemployment benefits likely breathed a sigh of relief earlier this month after Congress overwhelmingly agreed to extend unemployment insurance payments for as many as 20 weeks. But a nonprofit labor watchdog warns that millions are still at risk of losing that financial lifeline if lawmakers don't renew a key unemployment provision contained within the American Recovery and Reinvestment Act.
Even with the latest extension, jobless benefits contained within the recovery act are set to expire at the end of next month, resulting in 30,000 unemployed workers losing benefits each day starting in January, according to the National Employment Law Project. The group projects the number will rise to nearly 3 million by March.
AOL after Time Warner will be a substantially smaller company, at least in terms of the number of people it employs. The Internet pioneer, which is the parent of DailyFinance, revealed the rough outlines of a long-anticipated downsizing Thursday, saying it plans to reduce its global workforce by one-third, or 2,500 people, following its spin-off from Time Warner (TWX) next month.
To achieve that figure, the company is offering enhanced severance packages to volunteers who step forward between Dec. 4 and Dec. 11. (The spin-off will take place Dec. 9.) If the reduction can't be achieved solely through voluntary departures, the remainder will take the form of layoffs, with those workers receiving less-generous severance pay and benefits.
High school and college students are usually leagues ahead of their elders, technologically speaking. As they're dizzyingly texting and Tweeting and multitasking to their hearts' content, they're reading far fewer books than students of previous generations. No wonder some institutions are adopting drastic measures to stay on the cutting edge.
To that end, Blyth Academy in Toronto is claiming to be the first school to wholly replace textbooks with e-readers. Blyth contracted with Sony to provide its Touch Edition device to allof its students. The school has a kindred spirit in Cushing Academy, an elite Massachusetts prep school that this fall threw out 144 years of tradition and replaced its entire library collection with all-digital offerings, inicluding e-books. "When I look at books, I see an outdated technology, like scrolls before books," headmaster James Tracy told The Boston Globe in September.
The Federal Aviation Administration suffered a "widespread" computer malfunction Thursday morning, sending key parts of the national air traffic control system haywire and affecting Logan International in Boston, Hartsfield-Jackson in Atlanta, and all three major airports in New York. Authorities said the pilots were having trouble retrieving flight plans. CNN reported that the same system -- the National Airspace Data Interchange Network -- also failed last year. All flight plans were routed through Salt Lake City. Inclement weather was also delaying flights in the Northeast. According to the FAA, the computer system has been brought back online.
"The FAA has not seen a meltdown like this in years," a Continental Airlines (CAL) pilot told his passengers, CNBC's Becky Quick reported from a plane stuck at the gate at Newark Liberty International Airport. Quick said the pilot told passengers the system "completely melted down" today at 5 a.m. EST, forcing airline personnel to fill out flight plans by hand.
An improvement in sales at Kmart and cost-cutting overall helped Sears Holdings Corp. (SHLD) show better results in the third quarter.
The parent of Sears and Kmart stores posted a net loss of $127 million, less than the $146 million it posted the same time last year. That translates to $1.09 per share, or 80 cents per share after factoring out some one-time items, beating Wall Street's forecast of $1.09 per share.
The company's comparable store sales in the U.S. dropped 2.3%, with sales up 0.5% at Kmart, but down 4.6% at Sears. Kmart's sales rose thanks to better sales of toys and home items, while Sears was hurt by slow sales of appliances, lawn and garden items, tools and electronics.
Remember Steve Case? He's the guy that used to send you diskettes in the mail to get you to sign up for America Online so you could dial-up to the Internet. Then, in January 2000, he sold AOL to Time Warner (TWX) -- ultimate parent of DailyFinance -- in a $166 billion deal. On Dec. 9, Case's mutated creation, AOL, will become an independent company again.
But Case has moved on since 2000. And Wednesday, he scored a smaller financial victory when he sold Revolution Money to American Express (AXP) for $300 million, according to the The New York Times. Revolution Money lets users pay for things online using a Personal Identification Number with cards that lack names or account numbers. Compared to American Express, it's a lower cost, more secure way to pay.
While the Obama administration floated a trial balloon regarding the possible extension of TARP in The Washington Post Thursday, any hope for that balloon could be quickly burst in hearings today before the Congressional Oversight Panel. Members of the House and Senate already are considering the introduction of bills to kill the unpopular program.
The Congressional Oversight Panel Thursday morning will listen to five experts in a hearing dubbed, "Taking Stock: Independent Views on TARP's Effectiveness."
A problem with the FAA system that collects airline flight plans caused widespread flight cancellations and delays nationwide Thursday, the second time in 15 months that a glitch created such problems.
The Federal Aviation Administration said the problem was fixed around 10 a.m., but it was unclear how long flights would continue to be affected. Doug Church, a spokesman for the National Air Traffic Controllers Union, said controllers were still entering flight plans manually in some locations.
FAA spokesman Paul Takemoto said the problem started between 5:15 and 5:30 a.m. and affected mostly flight plans but also traffic management, such as ground stops and ground delays.
More modest progress on the employment front, as initial jobless claims were unchanged at 505,000 for the week ending November 14, but continuing claims decreased again, falling 39,000 to 5.61 million, the U.S. Labor Department announced Thursday.
A Bloomberg News economists survey had expected initial jobless claims to fall to 504,000 this week. Meanwhile, the four-week moving average for initial jobless claims decreased 6,500 to 514,000.
A year ago, initial jobless claims totaled 533,000 and continuing claims totaled 4.02 million.
Yet again the Golden State has set a de facto national environmental policy. It came this time when officials moved on Nov. 18 to ban sales of all big-screen TVs in California after 2010 if the sets don't meet state energy efficiency requirements. The ban has been brewing for several months now as the California Energy Commission (CEC) has debated a mandate that would require a 33% improvement in energy efficiency for all TVs sold starting Jan. 1, 2011, and a 50% improvement for sets sold starting Jan. 1, 2013.
These mandates would force off the market all current-generation plasma TVs with screens over 40 inches. LCD (liquid crystal display) sets tend to be more efficient, but many of the current models also wouldn't meet the new requirements. In short: Hasta la vista, Señor Plasma!
Sears Holding Corp. (SHLD) posted a smaller third-quarter loss Thursday of $127 million, or $1.09 per share, combating customers' continued desire to spend money elsewhere with tighter inventory management and cost-control efforts. Shares jumped 4% in pre-market trading. Excluding store closing costs and other items, Sears lost 81 cents per share, less than the average estimate of $1.09 loss per share.
J.P. Morgan (JPM) said Thursday that it will buy the half of the U.K. broker Cazenove it doesn't already own for around 1 billion pounds ($1.67 billion) in a deal that will net big payouts for many current and former employees. JPM shares dropped about 0.8% ahead of the bell.
The Organization for Economic Cooperation and Development doubled its forecast for the global recovery from the deepest recession in decades. But even its new numbers call for a remarkably weak economic rebound. "The good news is that the recovery -- albeit a weak one -- is under way," OECD Secretary-General Angel Gurría said in the group's latest semi-annual report.
Weak, indeed. The jobless rate is expected to peak in the first half of 2010 in the U.S., but it may not be until 2011 that unemployment begins to fall in the euro area, according to the OECD's forecasts. U.S. GDP is only expected to rise 2.5% in 2010 and 2.8% in 2011.
U.S. stocks are poised for a lower start Thursday morning on economic concerns and the possibility that stocks may have run up too far, too fast ahead of the economy. The retail sector is in focus with several retailers reporting earnings. The tech sector may likely see continued pressure following a downgrade of microchips by Bank of America.
In Asia Thursday, China's Shanghai Composite Index rose 0.5% to 3,321. In Hong Kong and Tokyo, the major indexes fell with the Hang Seng shedding 0.9% to close at 22,643 and the Nikkei losing 1.3% to end the day at 9,549.
In China, shares in energy producers surged as the country plowed itself out from under heavy snow and the national Heating Office was forced to turn household heating on a full two weeks before the normally scheduled date due to extremely low temperatures. The added demand for fuel and electricity sent shares of Changchun Gas and Shaan Xi Provincial Natural Gas soaring to the 10 percent daily limit for a second day in a row. Huaneng Power International (HUNWF) rose 1.8% and oil producing giant PetroChina (PTR) rose 1.1%.
Sears Holdings (SHLD) lost money for the second consecutive quarter as customers spent elsewhere despite a series of early holiday season promotions designed to bring them back to the retailer's brands.
The owner of Sears and Kmart stores lost $127 million, or $1.09 per share, for the period ended Oct. 31. That compares with a loss of $146 million, or $1.16 per share, a year earlier.
Sony (SNE) held its investor and analyst meeting on November 19th. Tucked among the presentation materials was information about the company's new targets aimed at getting its profits and operating income back to "normal" levels. The problem with the projection is that it is for the fiscal year ending March 31, 2013. Sony only expects a small profit in the 2011 fiscal year, mostly based on sales of its Playstations, TVs and camera hardware.
Sony previously said it would return to "normal" levels of margins in 2011. But reaching that goal has been pushed out by two years. "It's a very realistic plan; there is little flair, but the company has previously set targets it couldn't achieve," said Masaryk Ashing, a Tokyo-based analyst at Mitsubishi UFO Financial Group Inc, according toBloomberg.
Sales of kid's clothing and jeans helped a slimmer Gap (
It seems airlines will stoop to anything in their pursuit of saving or making money. Long gone are the days of free food on bargain flights. Be prepared to pay to check even one bag. As if those skinflint ideas weren't enough, AirTran Airways (
Dell (
As New York City copes with knowing it will soon host the trial of Khalid Sheikh Mohammed, mastermind of the September 11 terror attacks, there is growing concern about the security of the city and its inhabitants.
Stocks fell sharply Thursday after a sector downgrade and an overseas sell-off caused skittish investors to grow concerned that the rally has outpaced the potential for future earnings growth.
Google (
AstraZeneca (
A major tax increase on loose cigarette tobacco has caused pipe tobacco sales to surge dramatically this year. Historically, the tobacco industry manufactured around 270,000 pounds of pipe tobacco per month. Yet, in April, it hit 566,000 pounds, ultimately skyrocketing to 1.7 million pounds in August. While pipe smoking has risen somewhat in popularity since the recession began, 
I recently 
Shoppers are looking for more casual pajamas, antibacterial toiletries and moderately priced underwear, executives at Limited Brands (
It's rarely much fun to watch government officials testify before Congress. But Rep. Kevin Brady (R-Texas) managed to add a charge to a hearing held Thursday morning by the Joint Economic Committee when he told Treasury Secretary Timothy Geithner that bailouts and rising unemployment had eroded lawmakers' and taxpayers' confidence in him. He then asked him to resign. 
Two weeks ago, in a post about AT&T's 
The ongoing battle for internet bookselling heated up on Thursday. Walmart (
The AAA 
Morgan Stanley (
The Index of Leading Economic Indicators increased 0.3% in October -- its seventh straight monthly increase -- the Conference Board 
Jobless workers who saw the clock ticking on their unemployment benefits likely breathed a sigh of relief earlier this month after Congress overwhelmingly agreed to 
AOL after Time Warner will be a substantially smaller company, at least in terms of the number of people it employs. The Internet pioneer, which is the parent of DailyFinance, revealed the rough outlines of a long-anticipated downsizing Thursday, saying it plans to reduce its global workforce by one-third, or 2,500 people, following its spin-off from Time Warner (
High school and college students are usually leagues ahead of their elders, technologically speaking. As they're dizzyingly texting and Tweeting and multitasking to their hearts' content, they're reading far fewer books than students of previous generations. No wonder some institutions are adopting drastic measures to stay on the cutting edge.
The Federal Aviation Administration suffered a "widespread" computer malfunction Thursday morning, sending key parts of the national air traffic control system haywire and affecting Logan International in Boston, Hartsfield-Jackson in Atlanta, and all three major airports in New York. Authorities said the pilots were having trouble retrieving flight plans. CNN 
Remember Steve Case? He's the guy that used to send you diskettes in the mail to get you to sign up for America Online so you could dial-up to the Internet. Then, in January 2000, he sold AOL to Time Warner (
While the Obama administration floated a
More modest progress on the employment front, as initial jobless claims were unchanged at 505,000 for the week ending November 14, but continuing claims decreased again, falling 39,000 to 5.61 million, the U.S. Labor Department 
Yet again the Golden State has set a de facto national environmental policy. It came this time when officials moved on Nov. 18 
The Organization for Economic Cooperation and Development doubled its forecast for the global recovery from the deepest recession in decades. But even its new numbers call for a remarkably weak economic rebound. "The good news is that the recovery -- albeit a weak one -- is under way," OECD Secretary-General Angel Gurría said in the group's latest 
U.S. stocks are poised for a lower start Thursday morning on economic concerns and the possibility that stocks may have run up too far, too fast ahead of the economy. The retail sector is in focus with several retailers reporting earnings. The tech sector may likely see continued pressure following a downgrade of microchips by Bank of America.
In Asia Thursday, China's Shanghai Composite Index rose 0.5% to 3,321. In Hong Kong and Tokyo, the major indexes fell with the Hang Seng shedding 0.9% to close at 22,643 and the Nikkei losing 1.3% to end the day at 9,549.
Sony (
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