Business Briefs - Friday
TECH/TELECOM
Digital music sales rise, CDs fall
Downloads of digital music albums grew 60% in the 1st 6 months of ‘07, according to Nielsen SoundScan. The increase in music downloads should bolster Apple’s () bottom line, since the company’s online music store, iTunes, is estimated to garner more than 70% of digital music sales. Music downloads for the 1st half of this year totaled 23.5 mil units, which is still dwarfed by CD sales, which fell 19% to 205.7 mil units. Apple dipped 0.3% to 132.30.
Motorola, () a cell phone maker, said it will take a $101 mil pretax charge in Q2 tied to an ongoing restructuring and 2,100 job cuts. In May, it said it would cut another 4,000 jobs in addition to the 3,500 layoffs it announced earlier. Shares edged up 0.2% to 17.84.
Inter-Tel, () a communications software maker, said it sees Q2 revenue slipping on lower-than-expected core telephone system sales. The company now forecasts $113.5 mil- $115.5 mil vs. $116.9 views. Last year’s revenue was $115.9 mil. Shares fell 1% to 24.
ADC Telecommunications, () a networking equipment maker, said it will cut about 50 jobs in Germany as part of a restructuring. Shares rose 1.7% to 18.82.
MEDIA
Dow Jones denies report of deal
The publisher of the Wall Street Journal denied a London magazine report that it had finalized a deal to sell the company to Rupert Murdoch’s News Corp. () Sources close to the talks said Dow Jones () wants Murdoch to raise his initial $5 bil offer. Analysts speculate that Murdoch may need to boost his $60-a-share bid by a few dollars in order to lock up the deal. In late June, Murdoch said an agreement must be reached in 2 weeks or not at all. Dow Jones rose 2% to 59.07. News Corp. edged up 2 cents to 23.26.
METALS
Material Sciences drops on loss
The maker of steel products and engineered materials sank 4% to 12.30 after it posted a Q1 loss of 2 cents a share, missing views for a 4-cent gain. Material Sciences’ () sales fell 20% to $60.7 mil on weakness in the U.S. auto, residential and commercial construction markets. The company said it sees the slowdown continuing through this fiscal year.
AK Steel () said it will charge an additional $225 per ton for all shipments of electrical steel products shipped in Aug. Its shares dipped 0.4% to 38.39, but they’ve risen 127% this year.
BUILDING
Meritage Homes’ sales plummet
The latest builder to warn of weak results said it will post major declines in home sales and orders in Q2 and take $100 mil in charges because of the downturn in the housing market. Meritage Homes () said preliminary results show home closing revenue fell 37% to $569 mil and its home backlog declined 39% to $1.2 bil. Home orders slumped 28% to $502 mil while buyer cancellations rose to approximately 37% of orders. Despite the warning, Meritage rose 2.4% to 26.73, though still well below the 90 or so it was trading at just 2 years ago.
RETAIL
Burger King to go trans fat-free
The No. 2 burger chain said it will go completely trans fat-free by the end of ‘08. Burger King () said hundreds of its more than 7,100 restaurants have already stopped using partially hydrogenated vegetable oil, which can raise bad cholesterol and lower healthy cholesterol, increasing the risk of heart disease. McDonald’s () said earlier this year it had selected a new trans fat-free oil, but has yet to fully transition to it. Wendy’s () started using cooking oil with zero grams of trans fat last year. Burger King fell 1.2% to 26.22.
Wendy’s, () the No. 3 burger chain, said its same-stores sales rose 0.7% as its U.S. stores rolled out its new Triple Stack cheeseburger. At its franchise stores, comparable sales rose 0.4%. The company said its new market-based strategy hurt some of its stores in Q2, but holds long-term benefits. Shares edged up 2 cents to 38.
CONSUMER
Sony: No PS3 cuts to boost sales
The president of the electronics giant said Sony () has no plans to cut prices on its PlayStation 3 in a bid to increase sales of the video game console. The top PS3, which carries a U.S. price tag of $599, is being trounced by sales of rival Nintendo’s Wii, which sells for only $250. Analysts have suggested Sony cut PS3 prices by as much as $150 to protect its market share. But Sony’s president said the system just needs more games to attract customers. Sony rose 1.5% to 53.14.
BEVERAGES
Bud optimistic about Asian sales
The U.S. brewer said rising incomes in India and China will boosts its international revenue. Anheuser-Busch’s () overseas sales account for only 10% of its revenue, but its growth rates in foreign markets is strongly outpacing U.S. sales growth. The maker of Budweiser has invested about $1.3 bil in mainland China and said that sales there and in India could double in the next decade. It fell 1% to 51.63.
