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Best Buy Co Inc
Electronics retailer Best Buy (BBY) reported a 30 percent drop in its second-quarter profits. CEO Brian Dunn attributed the decline to U.S. consumers cutting back, leading to the fifth straight quarterly decline in same-store sales at Best Buy locations open at least 14 months. The retailer also lowered its full-year earnings forecast. While Best Buy derives the lion’s share of sales from its nearly 1,100 stores, it has been working to bolster its online presence to better compete against Amazon.com (AMZN) and other e-tailers. Dunn is also counting on the holiday season to boost sales of some mobile electronics, such as tablets, where it has been gaining market share.
French bank Société Générale unveiled plans to sell $5.4 billion in assets to shore up its capital base. The bank’s share price fell more than 50 percent this summer, reflecting investor concerns that Europe’s sovereign debt crisis could undermine the financial stability of the Continent’s banks. Société Générale will unload parts of its corporate- and investment-banking businesses, including a U.S. unit that finances commercial real estate. Rating firm Moody’s (MCO) downgraded the French lender a day after the announcement.
Volkswagen is taking a timeout from its buying spree after suffering setbacks in its effort to become the world’s largest automaker. The German carmaker is putting its planned merger with Porsche on hold because of pending lawsuits over accusations Porsche’s management misled investors during its failed attempt to buy VW three years ago. Porsche has repeatedly denied wrongdoing in those suits. Meanwhile, Japan’s Suzuki wants to cut ties with VW as their 20-month partnership was plagued with infighting and failed to yield a single project.
Maersk, the world’s largest container shipper, will begin offering a daily “conveyer belt” of ships between Asia and Northern Europe to improve the on-time delivery of goods. Currently, nearly half of the Danish company’s shipments arrive late, which can cause problems for clients that keep low inventories. The new system will use 70 ships to travel via the Panama Canal to connect China and Malaysia with Britain, the Netherlands, and Germany. Maersk is promising partial refunds on delayed cargo.
Australia’s Qantas Airways is counting on five company-owned carriers to attract customers in China as it redirects resources away from Europe. Its international business loses more than $200 million a year. The airline already has three units operating in Asia and is launching a premium carrier in Southeast Asia and a budget venture in Japan. The strategy centers on China, a market 60 times bigger than Australia. Qantas will buy as many as 110 new narrowbody planes from Airbus for Asian routes.
— Caxton Associates: Andrew Law will replace founder Bruce Kovner as CEO
— Boston Scientific: J&J’s Michael Mahoney tapped to be CEO next year
— Morgan Stanley: Ex-Fed staffer Vincent Reinhart named chief U.S. economist