BUSINESS BRIEFS
HP's first-quarter results give tech investors hope
Associated Press
SAN FRANCISCO — Hewlett-Packard Co. started its fiscal year with a first-quarter profit above expectations and predicted its performance will improve in the months ahead, providing a ray of hope in the gathering economic gloom.
The Palo Alto-based maker of computers and printers said yesterday it earned $2.13 billion, or 80 cents per share, for the three months ended in January.
That was a 38 percent increase from net income of $1.55 billion, or 55 cents per share, in the same period a year earlier.
CREDIT SUISSE SUSPENDS TRADERS
GENEVA — After seeming to have skirted the worst of the mortgage issues plaguing the financial sector, Credit Suisse revealed yesterday that it had suspended a "handful" of traders for overvaluing assets and would take a $1 billion hit to its first-quarter results.
Switzerland's second-largest bank said it would still post a profit for the period, but the mispricing of asset-backed securities led to an overvaluation of about $2.85 billion.
Traders didn't update their figures to keep up with the market downturn, and this tardiness resulted in assets being marked higher than their actual value.
DELTA, NORTHWEST DEAL IN 'JEOPARDY'
ATLANTA — A $20 billion deal to combine Delta Air Lines Inc. and Northwest Airlines Corp. was in "serious jeopardy" late yesterday because the pilots unions from both companies were unable to reach an agreement on blending their seniority lists, two people close to talks told The Associated Press.
The people said the pilots unions have agreed on a comprehensive joint contract, but they are unable to agree to how seniority for the 12,000 pilots would work under a combined carrier. The people asked not to be named because of the sensitive stage of the talks.
WAL-MART'S LOW PRICES PAY OFF
NEW YORK — Defying the doldrums that many retailers are feeling, Wal-Mart Stores Inc. expects a more profitable year selling to penny-pinching shoppers after its renewed focus on low prices paid off over the holidays with a 4 percent rise in fourth-quarter profit.
The world's largest retailer, emerging from a yearlong turnaround effort after sales stumbles in 2005 and 2006, said yesterday that aggressive holiday discounts and improvements in its more than 4,000 U.S. stores boosted sales despite consumer worries.
STAPLES' BUYOUT OFFER REJECTED
BOSTON — Corporate Express NV yesterday swiftly rejected an unsolicited $3.67 billion buyout offer from Staples Inc. as too low, but some analysts expect the strategic advantages of combining the two office products suppliers will yield an eventual agreement.
Staples disclosed yesterday it had offered to pay a hefty premium in an all-cash bid for Corporate Express. The Netherlands-based wholesaler would expand Staples' profitable segments serving business customers and overseas clientele after recent slow sales at Staples' U.S. stores.
But Corporate Express rejected the offer about two hours after the world's largest office products supplier announced its bid.
YAHOO FACING FIGHT OVER BOARD
SEATTLE — Microsoft Corp. is getting ready to take its bid for Yahoo right to the Web portal's shareholders, even as analysts wait for a higher offer. Separately, Yahoo Inc. adopted new severance packages that protect employees in the event of a Microsoft takeover.
Microsoft has hired proxy solicitation group Innisfree M&A Inc. to help oust Yahoo's 10-member board, all of whom are up for re-election this year.
A source close to the deal who is not authorized to speak publicly about it said that Microsoft could spend $20 million to $30 million on that effort.
