BUSINESS BRIEFS
Sprint shares fall despite beating 2Q expectations
Associated Press
KANSAS CITY, Mo. — Sprint Nextel Corp.'s up-and-down road to recovery continued yesterday as the company reported adjusted second-quarter results that beat Wall Street expectations as well as a slower loss of subscribers.
But the nation's third-largest wireless carrier also said it expected customer losses to ramp back up next quarter and said it was selling $3 billion in convertible stock, partly to pay down debt.
Sprint lost $344 million, or 12 cents per share, versus earnings of $19 million, or 1 cent per share, during the same period a year ago.
Sprint's shares tumbled $1.21, or 14.2 percent, to close at $7.34.
TIME WARNER EARNINGS TUMBLE
NEW YORK — Time Warner Inc.'s second-quarter earnings fell 26 percent on declining subscriber fees at its AOL online unit and lower ad revenue at the Time publishing business, the media conglomerate said yesterday.
The company affirmed its full-year financial targets after revenue rose at its film, cable and networks segments. Time Warner also took legal and tax steps that make it possible to split its AOL online business and sell it in parts.
The New York-based media conglomerate said net income fell to $792 million, or 22 cents per share, from $1.07 billion, or 28 cents per share, a year ago.
CONNECTICUT SUES COUNTRYWIDE
HARTFORD, Conn. — Connecticut sued Countrywide Financial Corp. yesterday, becoming the latest state to take the mortgage lender to court over its lending practices.
State Attorney General Richard Blumenthal alleged that Countrywide misled borrowers into taking on risky home loans they could not afford. California, Illinois, Florida and the city of San Diego have made similar claims in their own lawsuits against the company.
Countrywide, once the nation's largest mortgage originator before a jump in bad loans ravished its business, has been blamed for helping to cause the nation's mortgage meltdown.
Countrywide said in a statement that it cannot comment on pending litigation. But the company noted that it had previously announced its commitment to responsible lending practices, including an effort to keep an estimated 265,000 customers in their homes by modifying at least $40 billion in troubled mortgages.
CARMAX TO SHRINK STAFFING, GROWTH
RICHMOND, Va. — Used vehicle retailer CarMax Inc. said yesterday it is reducing staffing levels and will temporarily slow its store growth after seeing a sharp drop in car and truck sales because of high gas prices.
CarMax originally withdrew its fiscal-year sales and earnings guidance in June, after sales dropped beginning Memorial Day weekend. From the Memorial Day weekend through the end of May, CarMax said its same-store sales — or sales at stores open at least a year — fell 5 percent.
Those sales continued to fall in June and July, resulting in an average drop of 17 percent for the two months, the company said yesterday.
DEVELOPER BUYS STAKE IN CIRQUE
DUBAI, United Arab Emirates — The government-controlled developer of palm-shaped islands off Dubai's coast and a related investment arm said yesterday they have bought a 20 percent stake in international circus touring company Cirque du Soleil.
Property developer Nakheel and investment company Istithmar World Capital did not say how much they paid for their share of the group, which began performing in Quebec nearly a quarter century ago and is today a mainstay of theaters in Las Vegas and the Far East.
The agreement keeps control of the Montreal-based entertainment company in the hands of founder Guy Laliberte, putting to rest for now speculation that the troupe would be sold outright.
