Eastman Kodak (EK) chairman Daniel Carp won't try to turn his ailing company around alone. On Apr. 11, he named former Lucent Executive Vice-President Patricia Russo chief operating officer, a post that had been vacant since Carp replaced George Fisher as CEO early last year. Russo left her last assignment, running Lucent's (LU) $24 billion business communications division, after a reorganization last summer. She remains chairman of Avaya (AV), a communications systems and software company.
Russo's appointment highlights Kodak's need for more management expertise in the digital world. But some Kodak watchers reacted coolly. Their concern: Russo has no background in consumer products, but will directly oversee Kodak's senior consumer products executives. Responds Russo: "I don't hold myself out as a consumer expert. There are enough of those inside Kodak already."
Carp says Russo brings skills "right in the sweet spot," where Kodak needs them. Investors in Kodak, whose shares are down 34% from their high last year, hope Carp is right. With tech stocks tanking, even venture capitalists couldn't make the big bucks forever. In the fourth quarter, the average venture fund lost 6.3% of its value, according to a report by Venture Economics. The quarterly loss was the first since 1998's third quarter and the biggest quarterly drop since at least 1980. For the year 2000, the average fund gained 37.6%.
Venture Economics Vice-President Jesse Reyes says the shakeout will hurt newer venture funds in coming quarters. Pools formed as recently as 1998 have already paid out large profits to limited partners, but Reyes says funds formed last year will have trouble catching up. Average venture returns have ranged from 11% in 1994 to 165% in 1999. CNN is betting that Lou Dobbs will restore lost luster to its financial programming. The Atlanta-based cable news channel, a unit of recently merged AOL Time Warner, rehired Dobbs on Apr. 9 as anchor and managing editor of Moneyline News Hour. Dobbs quit two years ago after losing a power struggle with Richard Kaplan, then head of CNN's domestic operations. Moneyline's ratings tanked after Dobbs resigned, and CNN's financial channel, CNNfn, fell further behind leader CNBC.
Kaplan's departure from CNN in August helped set the stage for Dobbs's return from Space.com, a news and entertainment Web site about outer space. Dobbs's first priority at CNN: "Reestablishing myself with my old audience and building a new one." EMC (EMC), one of the last pockets of strength in the computer industry, is getting hit by falling corporate technology budgets. On Apr. 11, the data-storage leader disclosed that revenues will grow about 20% this year, instead of the 25% to 35% it had projected. First-quarter profits will come in 10% below Wall Street expectations. For the year, EMC now expects "modest" profit growth, suggesting analyst forecasts of a 20% gain are too high. EMC shares, already down 67% from their high last year, closed down 6% on Apr. 11, at $32.21. Investors had hoped that Aetna's (AET) new CEO, Dr. John Rowe, could turn the ailing health-maintenance organization around. But the company can't seem to get a grip on medical costs. On Apr. 10, it warned that 2001 profits are sinking--but offered few details. The company has to swallow $90 million in unanticipated costs from medical-services provided last year. Half stems from the Medicare business it exited, but the other half isn't likely to go away because of rising costs in its commercial business. Woe is Motorola (MOT). Even though the Schaumburg (Ill.) electronics giant warned in February that it would likely suffer its first quarterly loss in 15 years, the company managed to disappoint Wall Street on Apr. 10 with results much weaker than had been expected. Motorola reported sales of $7.8 billion for the first quarter, down 11% from $8.8 billion a year earlier. Excluding charges, its loss of $206 million, or 9 cents a share, compares with earnings of $481 million, or 21 cents a share, a year earlier. The company expects another, deeper loss in the current quarter. -- The U.S. and the European Union ended a dispute over Europe's preferential treatment of bananas from its former colonies.
-- Yahoo! (YHOO) is laying off 12%, or 421, of its 3,510 workers in a move to cut costs.
-- Palm (PALM) rival Handspring (HAND) said it would use Palm's operating system through 2009. Who would have thought beleaguered Amazon.com (AMZN) could spark a market rally? After the e-commerce site said on Apr. 9 that first-quarter losses would be lower than expected, its shares soared 33%, to $11.18, lifting other tech stocks. Analysts remain wary of slowing growth at Amazon, but investors bid the stock up 11%, to $13.32, on Apr. 11, when the company announced that it will run Borders Group's (BGP) Web site.