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JANUARY 31, 2005
Edited by Monica Gagnier HEADLINER Stephen Cooper: Doctor Doughnut  When restructuring specialist Stephen Cooper gets a call for help, it's often to guide a company into -- or out of -- bankruptcy. That was the case at his latest job as CEO of Enron. But with his next assignment -- CEO of Krispy Kreme Doughnuts (KKD
), a position Cooper accepted on Jan. 18 -- the question is whether he's arriving in time to keep the troubled doughnut chain out of Chapter 11. Investors think so -- Krispy Kreme's shares rose 10%, to $9.61 -- and so does Cooper. "This company still has pretty good cash flow and tremendous brand equity," he says.Cooper's first task: Persuading banks not to call in a $150 million loan, although Krispy Kreme is in technical default. And analysts say Cooper may have to shutter as many as 70 of the chain's 400 restaurants, remnants of a disastrous expansion spree by outgoing CEO Scott Livengood. But ultimately, Cooper will be judged on whether he can accomplish a turnaround without a trip to the courthouse. By Dean Foust It Just Wasn't GM's Year General Motors (GM ) had mostly bad news when it reported earnings on Jan. 19. Slower sales in the U.S. and a $742 million loss from its troubled European business cut the carmaker's 2004 earnings by $200 million, to $3.7 billion, or $6.51 a share. In 2003, GM earned $3.8 billion, or $7.14 a share. Only record profits of $2.9 billion from the auto giant's GMAC (GM ) finance arm in 2004 kept profits from really tanking, even as revenues rose 5%, to $193 billion. Things will only get worse. GM Vice-Chairman and Chief Financial Officer John Devine says a $1 billion jump in health-care costs will trim 2005 profits -- to between $2.3 billion and $2.9 billion -- renewing concerns that agencies will drop GM's credit rating to junk status. That would raise GMAC's borrowing costs, making it tough to loan money at competitive rates. So it may carve out its mortgage-lending operations as a separate, wholly owned entity to protect the business from a credit downgrade.   New VC In The Valley  Bill Joy, co-founder and former chief scientist at Sun Microsystems (SUNW
), has joined Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers as a partner. Joy arrives at a time when VC firms are looking beyond traditional information technology for investment ideas. He will scour for business plans not only in computing but also in fields like alternative energy and new materials. "Science and technology are at a point right now where those kinds of things are happening," he says. Joy has already helped finance several startups on his own, and he has worked with Kleiner Perkins since the firm funded Sun in 1982.Charter Goes CEO Hunting After losing more than $6 billion in the cable-TV business, billionaire Paul Allen is switching managers at Charter Communications (CHTR ). Unhappy over continued losses and subscriber defections to satellite, the Charter board and CEO Carl Vogel "mutually" agreed that Vogel will leave the nation's fourth-largest cable company with a year left on his four-year contract. Vogel gets high marks for restructuring Charter's still-hefty $18 billion debt load. But he has been criticized for poor customer service and a slow rollout of new products like video on demand and Internet phone service. Charter named former Cablevision Systems (CVC ) COO Robert May interim CEO while it seeks a permanent replacement. Abbott Is In The Pink Abbott Laboratories (ABT ) proved there's still good money to be made in the drug game. The Abbott Park (Ill.) company said on Jan. 18 that fourth-quarter earnings rose 3%, to $975 million, as sales grew 15.5%, to $5.65 billion. Moreover, 2003 numbers included results from its hospital products unit spun off last year as Hospira (HSP ). Abbott got help from two drugs that it says will top $1 billion in sales in 2005: Humira, an injectable prescription for rheumatoid arthritis, and pain medication Mobic. Et Cetera... -- Ex-ImClone Systems (IMCL ) CEO Samuel Waksal settled insider-trading charges without admitting or denying guilt. -- Growth in online ads drove Yahoo!'s (YHOO ) fourth-quarter profits up nearly 500%. -- Fannie Mae (FNM ) cut its dividend in half to help close its capital shortfall. Closing Bell: Maytag  Maytag (MYG
) shares were hung out to dry on Jan. 19 after Best Buy (BBY
) said it will no longer carry household appliances made by the Newton (Iowa) company. The big box retailer says its customers prefer other brands. Maytag's stock tumbled 10% to close at $16.73.
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