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Chief Leaves Barnes & Noble After Losses on E-Readers

July 8, 2013 by Leave a Comment

William Lynch Jr., the chief executive of Barnes Noble, resigned on Monday, two weeks after a devastating earnings report that accentuated the bookseller’s losing battle against powerful rivals like Amazon.

Mr. Lynch’s departure was part of a series of sweeping changes the company announced as it tries to regain its footing after a failed initiative to build up its Nook division and compete in the increasingly crowded market for e-readers. When it revealed its fourth-quarter earnings late last month, Barnes Noble said it would cease making its own color tablets, an acknowledgment that they were lagging popular brands like Amazon’s Kindle Fire and Apple’s iPad.

Instead, the company said it would form partnerships with third parties to make the color devices, while it continued to make and sell its own black-and-white versions of the Nook.

In a statement late Monday, the company said that Michael P. Huseby had been appointed chief executive of the Nook division and president of Barnes Noble. Mr. Huseby has served as chief financial officer since joining Barnes Noble in March 2012; previously he held that position at Cablevision Systems, a media company.

Max J. Roberts, the chief executive of the college division, will report to Mr. Huseby, while Mr. Huseby and Mitchell S. Klipper, the chief executive for the retail stores, will report to Leonard Riggio, the company’s chairman.

The moves on Monday appeared to be a step toward separating the digital and retail divisions, as the company has indicated it might do. Barnes Noble has been in talks over a potential sale of its digital assets, as well as its 675 bookstores.

Microsoft is one potential buyer of the Nook business; last year it invested hundreds of millions of dollars to acquire 17.6 percent of the division.

Mr. Riggio has expressed interest in taking back ownership of the physical stores that make Barnes Noble the largest bookstore chain in the country. Mary Ellen Keating, a spokeswoman for Barnes Noble, declined to provide an update on that offer.

There was no indication that a new chief executive would be named.

“Because the company is in a transition period, we have no immediate plans to name a C.E.O.,” Ms. Keating said.  

 “We thank William Lynch for helping transform Barnes Noble into a leading digital content provider and for leading in the development of our award-winning line of Nook products,” Mr. Riggio said in a statement issued Monday. “As the bookselling industry continues to undergo significant transformation, we believe that Michael, Mitchell and Max are the right executives to lead us into the future.”

The financial results for the fiscal fourth quarter underscored the urgency of the need to take action. The Nook unit showed a $177 million loss in earnings before interest, taxes, depreciation and amortization, or Ebitda, more than doubling the loss from the period a year earlier. Sales fell 34 percent, to $108 million.

The signs have been ominous for the company since the beginning of the year, when it announced that sales for the nine-week holiday period in late 2012 had declined at both its bookstores and in the Nook unit.

Mr. Lynch joined Barnes Noble in February 2009, with no previous experience in bookselling. He was executive vice president for marketing at HSN.com and also worked for Gifts.com.

At the time, his arrival was hailed as a forward-thinking move, since Mr. Lynch, a Texas native, was only 39 years old and fluent in e-commerce and technology. Within months, Barnes Noble introduced its first Nook e-reader.

To publishers, Mr. Lynch had performed a temporary miracle, helping create a product that provided a welcome competitor to Amazon’s Kindle, which dominated the market and offered e-books at a relatively inexpensive price.

The Nook was initially successful, drawing critical praise and capturing consumers who were uneasy about buying an e-reader — at the time a brand-new device — online, without testing it out in person. Barnes Noble’s hundreds of retail stores allowed potential customers to see and touch what they were buying.

But even though Barnes Noble quickly gained a sizable piece of the e-book market, it was not enough to ward off Amazon. And as black-and-white e-readers gave way to multifunctional color tablets, Barnes Noble found itself competing unsuccessfully against companies many times its size, like Amazon and Apple, that have had technology in their DNA from the start.

As chief executive, Mr. Lynch worked from the company’s Ninth Avenue office in Manhattan, across town from the Fifth Avenue building where Mr. Riggio keeps his office. Mr. Lynch threw his energies into the digital side of the business, taking far less of an interest in the retail stores, and frequently flew to Palo Alto to build up Barnes Noble’s presence in Silicon Valley, where their e-readers are designed.

Mike Shatzkin, the founder and chief executive of the Idea Logical Company, a publishing consultant, said a split of the business could help stave off the company’s decline.

“The Nook business clearly is going to need some global investment to have any kind of chance at all, and it certainly looks possible that they will be better off separate than together,” Mr. Shatzkin said. “There’s a glide path to oblivion, and you can affect the speed of the decline. Nobody’s going to bring back a robust brick-and-mortar book business.”

Article source: http://www.nytimes.com/2013/07/09/business/barnes-nobles-chief-executive-resigns.html?partner=rss&emc=rss

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Philips Reports a Loss and Announces Sale of Unit

January 30, 2013 by Leave a Comment

Funai will assume responsibility for the manufacturing of the Philips products but license and sell them under the Philips brand for five years. It has an option to renew.

The disposal is the latest in a series of moves by Philips as it gradually shifts its corporate focus away from consumer electronics manufacturing — while continuing to draw some benefit from the historical strength of its brand.

Philips still makes some popular household products such as coffee machines, electric toothbrushes and electric shavers. But its cutting-edge technologies are now mostly concentrated in the lighting sector, where it is the world’s largest manufacturer; and in health care equipment, where it competes with General Electric and Siemens in making medical imaging equipment.

In addition to the Funai deal, Philips also reported fourth quarter earnings Tuesday that were hammered by a €509 million cartel-forming fine — the largest ever levied by European regulators.

Philips said its underlying business improved on an operational basis, with its lighting arm, which accounts for a quarter of the company’s total business, seeing sales rise 43 percent.

Excluding restructuring charges and the fine, earnings were up 50 percent to €875 million, the company said.

“Our operational results improved across all sectors, as a result of increased sales, overhead cost reductions, and gross margin expansion,” said Chief Executive Frans van Houten.

The fine, levied in December against Philips, LG Electronics, Panasonic and others, came after regulators concluded that the companies engaged in price fixing in the television market over two decades. Philips, which is fighting the fine, disposed of its television division to China’s TPV Technology last year in a deal similar to the one announced Tuesday with Funai.

Overall, the company’s fourth quarter net loss widened to €358 million from €162 million from the same period in 2011, with both years affected by big charges: in 2011 Philips wrote down the value of its lighting inventory and booked big losses on the now-disposed television arm. Despite its fourth quarter loss, the company made a net profit over 2012 of €226 million, a marked improvement on 2011’s €1.3 billion.

In the 2012 period, sales grew 6.7 percent to €7.16 billion, but Philips said that would have been only 3 percent if recent acquisitions and currency effects were stripped out.

Since taking the top job at Philips in 2011, Van Houten has vowed to cut 6,700 jobs, or 5 percent of the company’s workforce, by 2014, as part of a cost reduction drive.

He said “challenging” conditions in Europe and the U.S. in 2012 hit orders and as a result he expects 2013 sales to start slowly before picking up in the second half of the year.

Shares were down 0.2 percent in early trading to € 21.90.

Article source: http://www.nytimes.com/aponline/2013/01/29/world/europe/ap-eu-netherlands-earns-philips.html?partner=rss&emc=rss

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Little Change on Wall Street

January 28, 2013 by Leave a Comment

Wall Street stocks were flat on Monday despite strong economic data and earnings results from Caterpillar, after a rally last week that took the Standard Poor’s 500-stock index above 1,500 for the first time in more than five years.

The S.P. 500 was almost unchanged in afternoon trading, as was the Dow Jones industrial average. The Nasdaq composite index gained 0.3 percent.

Caterpillar, a Dow component, rose 2.2 percent after it reported adjusted fourth-quarter earnings that beat expectations, though revenue was slightly below forecasts. The heavy machinery maker also said it remained cautious on the economy despite recent improvements.

“You can’t find more of a global bellwhether than Cat, and people are pleased with the number, which suggests there could be less concern about slowing growth in China after this,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

Thomson Reuters data through Friday showed that of the 147 S.P. 500 companies that have reported earnings so far, 68 percent exceeded expectations. Since 1994, an average of 62 percent of companies have topped expectations, while the average over the past four quarters stands at 65 percent.

A strong start to the earnings season has bolstered equities, with major averages rising for four straight weeks. The S.P. has gained for eight straight days, its longest winning streak in eight years, and closed at its highest since Dec. 10, 2007. The Dow ended at its highest since Oct. 31, 2007.

The S.P. 500 was about 4.1 percent away from its all-time closing high of 1,565.15 on Oct. 9, 2007.

The Commerce Department said Monday that orders for durable goods jumped 4.6 percent in December, a pace that far outstripped expectations for a rise of 1.8 percent.

“We continue to have a parade of better-than-expected economic reports. All in all, it’s a good picture. I think there’s a good chance we’ve reached a point of recognition where people don’t think the economy will crater,” Mr. Kaufman said.

In addition to a push from earnings, equities have also risen on an agreement in Washington to extend the government’s borrowing power. On Monday, Fitch Ratings said that agreement removed the near-term risk to the country’s AAA rating. Previously, the agency said the lack of an agreement would prompt a review of the sovereign rating.

Keryx Biopharmaceuticals said a late-stage trial of its experimental kidney disease drug met the main study goal of reducing phosphate levels in blood, sending shares up 53 percent.

Among bonds, the 10-year Treasury yield hovered around 2 percent. The 30-year was yielding 3.163 percent.

In Europe, stocks were ended mixed.

Article source: http://www.nytimes.com/2013/01/29/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Stocks Trade Slightly Lower

January 22, 2013 by Leave a Comment

Stocks were lower on Wall Street on Tuesday at the start of a busy week for corporate earnings after major indexes notched five-year highs.

In morning trading, the Standard Poor’s 500-stock index was 0.3 percent lower, the Dow Jones industrial average lost 0.2 percent, and the Nasdaq composite index was 0.4 percent lower. Both the Dow and S.P. 500 closed last week at their highest levels so far in this earnings season, with the gains largely coming on better-than-expected results.

But despite bullish statements from major companies, including big banks, many investors were worried other reports would reflect economic uncertainty in the fourth quarter.

“The market has been pleased with earnings thus far, and it is encouraging to see a cyclical company like DuPont show revenue strength,” said Adam Sarhan, chief executive of Sarhan Capital in New York, “but I’m waiting on more tech and energy earnings until I come down one way or the other on this season.”

DuPont reported revenue that was ahead of Wall Street expectations, sending shares up 0.9 percent. However, slumping demand for pigment and solar panel parts hurt fourth-quarter profit.

Travelers Companies gained 3 percent after forecasting higher premiums across its businesses, though it also posted earnings that fell by half from insurance losses related to Hurricane Sandy.

Johnson Johnson, the diversified health company, fell 0.8 percent after forecasting 2013 earnings below expectations, while Verizon Communications gained 0.6 percent after reporting a steep loss on pension liabilities and charges related to Hurricane Sandy.

All four companies are Dow components.

Over all, fourth-quarter earnings among the S.P. 500 companies are forecast to have risen 2.5 percent, according to Thomson Reuters data. That estimate is above the 1.9 percent forecast from a week ago but well below the 9.9 percent fourth-quarter earnings forecast from Oct. 1, the data showed.

Monday was a market holiday for Martin Luther King Jr.’s Birthday in the United States. President Obama, at his inauguration for a second term on Monday, called for aggressive action on climate change, economic equality and the federal budget.

Markets have recently been pressured by uncertainty stemming from Washington about the federal debt limit and spending cuts that could hamper American economic growth. Republican leaders in the House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the country’s debt limit, allowing the government to borrow enough to meet its obligations during that period.

In New York trading, Research in Motion jumped 10.6 percent a day after its chief executive said the company may consider strategic alliances with other companies after introducing devices powered by RIM’s new BlackBerry 10 operating system.

Article source: http://www.nytimes.com/2013/01/23/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Time Warner Cable Ad Campaign Aims at Regaining Customers

January 20, 2013 by Leave a Comment

On Monday, the company — the second-largest cable provider in the country behind Comcast — will begin a marketing campaign aimed at former subscribers who might be having second thoughts about their current video service.

The company says it will spend at least $50 million on broadcast, print, online and direct mail ads for the campaign, which it is calling “The Better Guarantee.”

The ads convey the idea that while the company’s cable service did not always live up to expectations in the past, it has become better.

“We, as a company, are fundamentally different and better than we were a few years ago when these upstart competitors started coming in,” said Jeffrey A. Hirsch, the chief marketing officer for residential services at Time Warner Cable. By upstarts, he was referring to Verizon FiOS and ATT U-verse, two relatively new fiber optic television and Internet providers that have gained subscribers at the expense of cable providers.

Some of the Time Warner Cable ads specifically challenge Verizon, saying it promised monthly savings that have not panned out.

“That promise of new isn’t such a great promise, and people are starting to come back to Time Warner Cable,” Mr. Hirsch said. “So we decided it’s time to put some muscle behind the idea.”

The campaign announcement comes a week before Time Warner Cable releases its fourth-quarter earnings, which may show deepening losses in television subscribers, known in the industry as basic video subscribers. Industry analysts at Jefferies Company published a forecast last week that had Time Warner Cable losing 140,000 such subscribers, a slight increase from the 129,000 it lost in the same quarter of 2011. The same forecast had three other cable providers stemming their losses year-over-year.

“The Better Guarantee” is an extension of “Enjoy Better,” a brand-image campaign that Time Warner Cable began last February to retain existing subscribers as well as win new ones. The new ads point to specific improvements the company has made: smartphone apps, on-demand TV options and narrower windows of time for home service calls. Gone are the dreaded four-hour windows, the company says; two-hour windows are now the norm and one-hour windows are being put in place.

In an interview by phone, Mr. Hirsch also mentioned “much faster Internet than we had two, three years ago” and a home security service.

To entice former subscribers to try Time Warner Cable again, the ads promote a 30-day money-back guarantee. “If the consumer doesn’t see that we’ve improved our service, we’ll send them their money back,” said Gregg Fujimoto, a senior vice president for the company.

Some of the ads feature actual subscribers, explaining why they came back to the company. Mr. Fujimoto said there would be use of social networking Web sites as well as traditional advertising media.

Other cable providers, facing the same competition from satellite and telecommunications providers, have also tried to burnish their reputations lately with ad campaigns. Comcast started a new phase of its marketing for Xfinity, its consumer services, last summer. The providers have also invested an enormous amount of money in infrastructure so that their television and Internet services are on par, or better, than their competition’s.

The providers are up against persistent discontent from subscribers who say their monthly bills are too high and their set-top boxes are too slow. Surveys for the University of Michigan’s American Consumer Satisfaction Index have shown for three straight years that Verizon FiOS is the highest-regarded television provider in the country.

ATT and two satellite providers, DirecTV and Dish Network, have also ranked above the industry average, while Time Warner Cable, Comcast and other cable providers have remained below the average. But the 2012 survey had some good news for Time Warner Cable: the company’s score ticked up four percentage points, the most of any television provider on the index.

Article source: http://www.nytimes.com/2013/01/21/business/media/time-warner-cable-ad-campaign-aims-at-regaining-customers.html?partner=rss&emc=rss

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Wall Street Ends Higher

January 9, 2013 by Leave a Comment

Wall Street stocks ended higher on Wednesday after Alcoa got the earnings season under way with better-than-expected revenue and an encouraging outlook for the year.

The Standard Poor’s 500-stock index rose 0.3 percent by the close of trading, the Dow Jones industrial average added 0.5 percent and the Nasdaq composite index was up 0.5 percent. European shares closed moderately higher.

Alcoa said it expected global demand for aluminum would continue to grow in 2013, though the company kept a cautious tone as worries lingered over a looming budget confrontation in Washington. Shares of Alcoa, the largest aluminum producer in the United States, were almost unchanged.

Still, investors were wary about the outcome of the fourth-quarter earnings season. Profits were expected to beat the previous quarter’s lackluster results, but analysts’ estimates were down sharply from where they were in October. Earnings were expected to grow by 2.7 percent, according to Thomson Reuters data.

Equities have pulled back over the last two sessions from last week’s rally, which was spurred by a deal in Washington that averted automatic spending cuts and across-the-board tax increases.

“With the euphoria of the fiscal cliff deal wearing off, the market is looking for the next positive theme and the hope is that earnings season can fill that need,” said Andre Bakhos, director of market analytics at Lek Securities in New York. “With expectations muted, any semblance of decent numbers could provide a robust upside potential.”

Constellation Brands, whose labels include Robert Mondavi and Ravenswood wines, fell 0.4 percent after it reported higher profit.

Apollo Group slid more than 7 percent after it reported lower student sign-ups for the third straight quarter and cut its operating profit forecast for 2013.

Dish Network late Tuesday announced a bid for Clearwire that trumped Sprint Nextel’s $2.2 billion offer, setting the stage for a battle over the wireless service provider. Clearwire was up 7.8 percent, while Sprint lost 1.8 percent.

Seagate Technology, the maker of computer hard drives, rose 5.9 percent after it raised its second-quarter revenue forecast.

Article source: http://www.nytimes.com/2013/01/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Wall Street Modestly Higher

January 9, 2013 by Leave a Comment

Wall Street stocks traded higher on Wednesday after Alcoa got the earnings season under way with better-than-expected revenue and an encouraging outlook for the year.

The Standard Poor’s 500-stock index rose 0.4 percent in afternoon trading, the Dow Jones industrial average added 0.6 percent and the Nasdaq composite index was up 0.5 percent. European shares closed moderately higher.

Alcoa said it expected global demand for aluminum would continue to grow in 2013, though the company kept a cautious tone as worries lingered over a looming budget confrontation in Washington. Shares of Alcoa, the largest aluminum producer in the United States, were 0.6 percent higher.

Still, investors were wary about the outcome of the fourth-quarter earnings season. Profits were expected to beat the previous quarter’s lackluster results, but analysts’ estimates were down sharply from where they were in October. Earnings were expected to grow by 2.7 percent, according to Thomson Reuters data.

Equities have pulled back over the last two sessions from last week’s rally, which was spurred by a deal in Washington that averted automatic spending cuts and across-the-board tax increases.

“With the euphoria of the fiscal cliff deal wearing off, the market is looking for the next positive theme and the hope is that earnings season can fill that need,” said Andre Bakhos, director of market analytics at Lek Securities in New York. “With expectations muted, any semblance of decent numbers could provide a robust upside potential.”

Constellation Brands, whose labels include Robert Mondavi and Ravenswood wines, fell 0.9 percent after it reported higher profit.

Apollo Group slid more than 9 percent after it reported lower student sign-ups for the third straight quarter and cut its operating profit forecast for 2013.

Dish Network late Tuesday announced a bid for Clearwire that trumped Sprint Nextel’s $2.2 billion offer, setting the stage for a battle over the wireless service provider. Clearwire was up 7.8 percent, while Sprint lost 1.3 percent.

Seagate Technology, the maker of computer hard drives, rose 4.5 percent after it raised its second-quarter revenue forecast.

Article source: http://www.nytimes.com/2013/01/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Smaller Cars Lift Ford’s Profit to $2.55 Billion

April 26, 2011 by Leave a Comment

Ford earned $2.55 billion in the quarter, or 61 cents a share, up from $2.09 billion, or 50 cents, in the period a year earlier. The results should ease some concerns that the company was losing momentum after fourth-quarter earnings missed expectations, though quickly rising gasoline prices and earthquake damage to auto parts plants in Japan still pose a threat to Ford and the rest of the industry.

Ford’s share rose 3 percent on Wall Street while General Motors shares were up 0.5 percent.

“Our team delivered a great quarter, with solid growth and improvements in all regions,” Ford’s chief executive, Alan R. Mulally, said in a statement. “We continue to accelerate our ‘One Ford’ plan around the world, delivering on our commitments to serve our global customers with a full family of best-in-class vehicles and deliver profitable growth for all, despite uncertain economic conditions.”

Typically, smaller cars result in lower profits. But new high-mileage models, including the Fiesta subcompact, allowed Ford to increase its pretax earnings in North America by 50 percent, to $1.8 billion. Globally, revenue rose 18 percent, to $33.1 billion.

On a per-vehicle basis, Ford generated about $1,519 in profit worldwide, an increase of 59 percent from the first quarter a year ago, even though revenue per vehicle sold was up only 9 percent, to $22,096.

The increases in sales and profit margins per vehicle offset higher commodity costs and investments in future growth, Ford said. Reduced debt has also cut interest payments.

The company cut its debt by $2.5 billion in the first quarter and said its cash reserves now exceed its debt by $4.7 billion. It reported $2.2 billion of positive cash flow for the quarter, compared with a $100 million outflow a year earlier.

“We are on track with what we said we’d do,” Ford’s chief financial officer, Lewis W. K. Booth, told reporters at the company’s headquarters. “We’re feeling pretty good.”

Mr. Booth said parts shortages related to last month’s earthquake and tsunami in Japan have cut production in Ford’s Asia-Pacific region by up to 14,000 vehicles, but that he expects the company to be minimally affected by the disaster.

“We’re not anticipating anything material,” he said. “We’re seeing fantastic efforts by the Japanese supply base to get their factories up and running.”

The company has been forced to substitute some parts, but “nothing that changes the quality of the vehicle,” Mr. Booth said. Ford also idled a truck plant in Kentucky for one week this month to conserve parts.

Excluding special items, Ford has posted operating profits for seven consecutive quarters. On that basis, its first-quarter operating profit of $2.6 billion was equal to 62 cents a share, up from $1.76 billion, or 46 cents a share. It was 22 percent higher than the consensus forecast on Wall Street, which expected an operating profit of about 51 cents.

In Europe, a recent trouble spot for much of the industry, Ford’s pretax profit grew to $293 million from $107 million in the first quarter of 2010.

Ford said it expects structural and raw-material costs to rise by $2 billion this year. In the first quarter its structural costs were $400 million higher, and commodity costs rose $300 million.

Ford said it expected to build 1.5 million vehicles worldwide in the second quarter, 12,000 more than a year ago.

“Our progress toward delivering profitable growth for all will continue as we aggressively manage short-term challenges and opportunities,” Mr. Mulally said. “We expect our annual volumes to continue to grow substantially, driven primarily by our growing product strength, a gradually strengthening economy and an unrelenting focus on improving the competitiveness of all of our operations.”

In the United States Ford’s sales jumped 12 percent in the first quarter, and it narrowly outsold its larger rival, General Motors, in March, though Ford’s market share fell 1.2 percentage points to 16.2 percent. For all of this year, Ford said it expects its share in the American and European markets to be equal to or better than 2010 levels.

In 2010, Ford rebounded from the recession that helped send its cross-town rivals into bankruptcy protection, earning a total of $6.6 billion.

Article source: http://feeds.nytimes.com/click.phdo?i=eff757ee09b5ef33b47aa1645c59c487

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