Already one of the most influential women on Wall Street, Citigroup's Marjorie Magner has jumped up another rung. On Aug. 6, the 54-year-old Brooklyn (N.Y.) native was named head of Citigroup's global consumer bank, overseeing retail banking, credit cards, and consumer finance.
As the outfit's most profitable arm, the consumer bank earned $4.5 billion in profit last year and generated half of Citigroup's total earnings for the first half of 2003. The promotion makes Magner the second woman to be named to a top post at Citi in a year, after Sallie Krawcheck, who runs equity research and the brokerage arm. Magner succeeds Robert Willumstad, who took over as president two weeks earlier as part of Chairman Sanford Weill's succession plan.
A 16-year Citigroup veteran, Magner has earned high marks for her acumen in acquisitions and consolidation. As the nation's largest financial institution moves forward on plans to buy up rival banks and bulk up in credit cards, those skills should come in handy. Merck is finally ready to complete its divorce from pharmacy-benefits-management outfit Medco Health Solutions (MRK) On Aug. 5, the drugmaker announced it would spin off the unit through a share distribution of new Medco stock to existing Merck shareholders on Aug. 19. Medco will pay Merck a $2 billion dividend as part of the deal. The move comes after Merck pulled the plug on a partial initial public offering of Medco because of meager market interest. Investors say Merck is better off without Medco, in part because of an ongoing Justice Dept. probe of the pharmacy-benefits-management industry. The mudslinging over Linux software is getting worse: On Aug. 4, top Linux distributor Red Hat (RHAT) filed a lawsuit against SCO Group (SCOX) in which it charged that the Unix software maker has waged an "unfair and deceptive campaign" intended to cast a pall over the fast-growing market for the Linux operating system. Red Hat's action comes after a $3 billion suit filed by SCO last March against IBM, in which SCO accused Big Blue of misappropriating parts of its copyrighted Unix software code for use in the version of Linux that it included in some of its computers. Red Hat says it filed its own case in hopes of expediting SCO's lawsuit against Big Blue, which has been hung up by SCO's unwillingness to let experts examine the disputed code. Could Tommy Hilfiger end up on the auction block? The troubled trendy apparel outfit couldn't have picked a better person to get it ready for sale than David Dyer. He was named president and chief executive on Aug. 4. Dyer, 54, did a masterful job of dressing up Lands' End (LE), and then selling the company to Sears Roebuck last year for a stratospheric $1.9 billion. Still, Dyer will confront some big problems at Hilfiger. The company has lost its allure with the young and urban, which has put pressure on sales and profits. A Hilfiger spokeswoman says the company isn't for sale, but some analysts believe Dyer's appointment belies that message. Blame it on Wal-Mart Stores. On Aug. 5, executives at Costco warned that the company's profits will fall below projections, in part because of stiffening competition from Sam's Club, Wal-Mart's wholesale discount chain. Earlier this year, a price war broke out between Sam's and Costco, putting pressure on margins. As a result, Costco, based in Issaquah, Wash., slashed its fourth-quarter profit estimate to 46 cents-48 cents a share, down from 54 cents-56 cents, for the period ending Aug. 31. The company also cut its full-year outlook to $1.48-$1.50 a share, down from $1.56-$1.58. The news sent Costco shares tumbling 22% over the next two days. EMC says it's back on track. On Aug. 6, the Hopkinton (Mass.) data-storage giant announced that it expects to record a profit for the rest of the year. The company also said it expects to generate revenue growth in the mid-teens for the second half of 2003, as well as for fiscal 2004. Chief Executive Joseph Tucci attributed the positive outlook to a slight improvement in tech spending and says its new line of products, including storage devices in the low, mid, and high end of the market, will help drive EMC's sales growth. "We're expecting the light at the end of the tunnel to grow brighter," he told analysts in New York. -- Tenet Healthcare (THC) has agreed to reimburse the U.S. government a record $54 million in overcharges.
-- A judge approved the Securities & Exchange Commission's $750 million fine against MCI.
-- SBC Communications (SBC) plans to deploy 1,000-plus high-speed Wi-Fi connections. Tech investors again want brisk sales growth, even in the battered networking market. On Aug. 5, Cisco Systems (CSCO) announced that quarterly earnings rose 27%, to $982 million, and said sales might grow up to 4% this quarter. Not good enough. Wall Street drove the stock down 8% in the next two days.