Best Buy talks end, source says; adjusted profit falls

NEW YORK, Fri Mar 1, 2013 — Best Buy Co. and founder Richard Schulze have ended their talks after Schulze and private equity investors sought three board seats in exchange for taking a minority stake in the company, a source familiar with the matter said on Friday.

Separately, the world’s largest consumer electronics chain posted quarterly results. Best Buy lost $409 million, or $1.21 per share, in the fourth quarter ended February 2, compared with a loss of $1.82 billion, or $5.17 per share, a year earlier.

On an adjusted basis, earnings from continuing operations fell to $1.64 per share from $2.18 a year earlier.

Revenue rose just 0.2 percent to $16.71 billion.

Schulze, who had made an informal proposal to buy Best Buy for $24 to $26 a share last August, failed to line up necessary debt and equity financing, the source said.

The founder’s efforts to negotiate a deal with private equity firms Cerberus Capital Management, TPG Capital and Leonard Green & Partners have also come to an end, the source said.

Jobless claims fall, give clearer sign of health

WASHINGTON, Thu Oct 25, 2012 – The number of Americans filing new claims for unemployment benefits fell last week, giving a clearer sign that the labor market is healing after wild fluctuations in claims data at the beginning of the month.

Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 369,000, the Labor Department said on Thursday.

The prior week’s figure was revised slightly higher to show 4,000 more applications than previously reported.

A Labor Department analyst said all states submitted data for the report and that there was nothing unusual in the raw data. The analyst said the data showed no signs of the factors that had appeared to generate sharp swings in the claims reading over the prior two weeks.

The four-week moving average for jobless claims, which smoothes out such volatility, rose 1,500 to a 368,000. Economists generally think a reading below 400,000 points to an increase in employment, with hiring likely to outpace layoffs.

The U.S. economy remains hobbled by a persistently high jobless rate. Incomes have stagnated and many families are awash in debts taken on during a housing bubble in the last decade.

Recently, however, the economy has shown a few positive signals, with the unemployment rate falling to 7.8 percent and retail sales picking up. Consumer spirits have also brightened.

Those signs of improvement appear to have done little to bolster President Barack Obama’s bid for a second term, and there is only one more reading on U.S. unemployment before voters go to the polls on Nov. 6.

Earlier this month, claims swung sharply lower and then higher, which a Labor Department analyst said was likely due to a change in the seasonal pattern that usually manifests at the beginning of the quarter. That distortion in the seasonal data appears to a have passed, the analyst said on Thursday.

Pandora shares down 14 percent on reports of rival Apple service

OAKLAND, Calif., Fri Sep 7, 2012 – Shares of Pandora Media Inc. fell 14 percent in premarket trading on Friday following media reports that Apple Inc. was in talks to license music for a radio service like the one Pandora operates.

The Wall Street Journal, citing people familiar with the matter, reported that Apple wants to license music for a custom-radio service that would work on its hardware, such as the iPhone, iPads and Mac computers, in a bid to expand its dominance in online music. Apple’s iTunes is the largest music retailer.

Apple’s service would likely be a preinstalled “app” on Apple devices, the New York Times reported.

Pandora shares were down $1.77 in premarket trading from their closing price on Thursday of $10.80

Apple initiated talks for a license with record companies only recently, the Journal reported, and it could be months before a service is launched.

An Apple representative did not immediately respond to an email seeking comment.

Like Pandora, which competes against Clear Channel, Sirius XM Radio and Spotify, Apple’s service would intersperse music with ads, the Journal reported.

Last week, Pandora reported better-than expected quarterly results on higher advertising revenue as more people listened to music on their mobile devices, and the company raised its full-year revenue outlook.

Retail sales fall for third straight month in June

WASHINGTON – Retail sales fell for a third straight month in June as demand slumped for everything from cars and electronics to building materials, a sign the economic recovery is flagging.
Retail sales slipped 0.5 percent, the Commerce Department said.
It was the first time sales had dropped in three consecutive months since late 2008, when the economy was still mired in a deep recession. Analysts polled by Reuters had expected retail sales to rise 0.2 percent.
The report adds to a spate of weak economic data that is raising pressure on President Barack Obama ahead of his November reelection bid. Republican challenger Mitt Romney is focusing his campaign on the weak economy that has plagued Obama’s presidency.
The report could raise hopes that the Federal Reserve could launch another bond-buying program to help the economy.
Job creation in the United States has slowed dramatically in the last few months, and recently the country’s factory sector also showed signs of contraction.
The retail data is particularly worrisome because it suggests consumer spending, which drives about two-thirds of the economy, is also sagging.

Adobe shares fall on cut in forecast after weak Europe outlook

Adobe shares fall on cut in forecast

SAN JOSE, Calif., Wed Jun 20, 2012 – Shares of Adobe Systems Inc. fell more than 7 percent in early trading after the Photoshop software maker cut its full-year revenue outlook on weakness in Europe, and a shift to a subscription model slows growth.

The company said on Tuesday it expects third-quarter sales at its unit that produces the Creative Suite design software to decline from second-quarter levels.

Analysts say the company’s shift to subscriptions from a licensing model might reduce the revenue upswing it usually sees after the launch of a software upgrade.

Adobe launched its Creative Suite 6 – which includes Photoshop, Illustrator, InDesign, Flash and Dreamweaver – and the Web-based Creative Cloud product in the second quarter.

“The problem with this strategy is that it will take Adobe around four years to generate the same level of revenues from a single subscriber that it would have earned through the sale of a single perpetual license,” Nomura analyst Rick Sherlund wrote in a note.

Jobless claims fall first time since April, labor market still on mend

WASHINGTON, Thu Jun 7, 2012 – The number of Americans lining up for new jobless benefits fell last week for the first time since April, a reminder that the wounded labor market is still slowly healing.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 377,000, the Labor Department said on Thursday. That was spot on the median forecast in a Reuters poll.

The government revised the prior week’s figure up to 389,000 from the previously reported 383,000.

Prior to last week, claims had risen in four consecutive weeks, adding to concerns over several months of lackluster hiring data. While the country emerged from a deep recession three years ago, the jobless rate last month was 8.2 percent, well above its long-term historical average.

Still, most of the recent increases in new jobless claims were marginal and the overall level of claims has held at levels consistent with a modest recovery in the labor market.

The last time claims fell was in the week that ended April 28. The four-week moving average for new claims, a measure of labor market trends, increased 1,750 last week to 377,750.

The claims report comes ahead of congressional testimony scheduled for later in the day by Federal Reserve Chairman Ben Bernanke, where he could give clues about the likelihood of further policy easing.

On Wednesday, Janet Yellen, Bernanke’s deputy and the vice chair of the Fed, laid out the case for the central bank to provide more support to a fragile economy as financial turmoil in Europe mounts.

Factory orders post surprise fall in April

WASHINGTON, Mon Jun 4, 2012 – New orders for factory goods fell in April for the third time in four months as demand slipped for everything from cars and machinery to computers, the latest worrisome sign for the economy.

The Commerce Department said on Monday orders for manufactured goods dropped 0.6 percent during the month. The government also revised its estimate for new orders in March to show a steeper decline.

Economists had forecast orders rising 0.2 percent in April.

The report showed broad weakness in a sector that has carried the economic recovery, adding to a growing body of soft economic data in the United States.

“Obviously it’s a slowdown in the economy,” said Joel Naroff of Naroff Economic advisors in Holland, Pennsylvania.

The Labor Department on Friday reported that job creation slowed in May for the fourth straight month. Also that day, the Institute for Supply Management said the pace of growth in manufacturing slowed modestly in May, although the ISM’s own gauge of new orders rose to its highest in over a year.

The Commerce Department report showed new orders for motor vehicles and parts fell 0.5 percent in April.

An increase in new orders for civilian aircraft buoyed the overall transportation sector.

Outside transportation, orders dropped 1.1 percent, with machinery down 2.9 percent and orders for computers and electronics off by 0.8 percent. The government also revised downward its estimate for new orders of long-lasting manufactured goods in April.

U.S. stock prices declined as investors fretted about signs of economic weakness around the globe and Europe’s intensifying debt crisis.

Penney quarterly same-store sales fall 1.8 percent

PLANO, Texas – J.C. Penney Co. Inc. said on Friday that sales at its stores open at least a year fell 1.8 percent over the holiday quarter, contributing to a sharp drop in its gross profit margin.

In the fourth quarter ended on Jan. 28, Penney had a net loss of $87 million, or 41 cents per share, compared with a profit of $271 million, or $1.13 per share, a year earlier.

Gross margin fell 7.4 percentage points to 30.2 percent, hurt by weak sales that prompted the department store chain to cut prices.

Penney reiterated its forecast of an adjusted profit of $2.16 per share this fiscal year.

Dow Chemical profit, revenue miss Wall Street expectations

MIDLAND, Mich. – Dow Chemical Co’s. quarterly profit and revenue missed Wall Street’s expectations as demand for electronics, plastics and coatings plunged, causing the company to slash production and aggressively discount some products.

The results sent shares of Dow, the largest U.S. chemical maker by revenue, down 1 percent.

Dow’s operating rate, a reflection of its full capacity, fell 9 percentage points to 72 percent in the quarter, levels not seen since the last recession.

Most of the capacity cuts came in Europe, where the continent’s debt crisis has sharply affected exports and where demand for Dow’s products is weakest, CEO Andrew Liveris told Reuters.

“We quickly intervened and started moving volume and basically gave up on price,” he said on Thursday. “Europe is a headwind for the whole year.”

The U.S. economy is “actually recovering nicely,” with electronic sales improving from a weak fourth quarter, though weak construction demand is a concern, he said.

The Chinese economy should continue to be strong, bolstered by large spending on manufacturing and construction, Liveris said.

“I don’t think we’re going to have to worry about China being a less-than-6-percent growth economy for a long time,” he said.”

For the fourth quarter, the company posted a net loss of $20 million, or 2 cents per share, compared with net income of $426 million, or 37 cents per share, in the year-ago period.

December producer prices fall 0.1 percent, DOL report says

WASHINGTON ― Producer prices fell in December as companies paid less for gasoline and vegetables, although higher prices for light motor trucks pushed a measure of underlying inflation higher.

The Labor Department said on Wednesday its seasonally adjusted index for prices received by farms, factories and refineries fell 0.1 percent.

Economists polled by Reuters had expected wholesale prices to increase 0.1 percent.

Excluding volatile food and energy, core producer prices rose 0.3 percent last month, the biggest rise since July. That was above economists’ expectations for a 0.1 percent gain.

The data appears to send mixed messages about inflation pressures in the U.S. economy.

A drop in energy prices has encouraged Wall Street and the U.S. Federal Reserve to forecast inflation will cool in coming months. Energy costs for businesses fell 0.8 percent last month, with gasoline down 2.3 percent. Food prices fell 0.8 percent.

At the same time, higher core prices – if eventually passed on to consumers by businesses – might make the U.S. central bank more cautious about taking additional steps to help the still-struggling U.S. economy.

That said, about 30 percent of the gain in core prices were due to an increase in prices for light motor trucks, the Labor Department said.

Prices in auto sector have been affected in recent months by floods in Thailand that last year disrupted supply chains. Prices for light trucks rose 0.9 percent last month, the biggest rise since July.