Credit Suisse’s Red Ink, Toshiba’s Blu Day
Credit Suisse finds another $2.85 billion in write-downs during an internal review, shaving off $1 billion in profits. Toshiba concedes the high-definition DVD war to Sony’s Blu-ray. And in the world of social networking, even layoffs become public affair
EWS AT A GLANCE
Credit Suisse writes down another $2.85 billion
Swiss bank Credit Suisse said it found pricing “errors” that led to $2.85 billion in write-downs on asset-backed securities and will shave $1 billion off first quarter profits. The unexpected announcement sent the bank’s shares down more than 7 percent in Zurich early today. (Reuters) Credit Suisse still expects to turn a profit, but said it is continuing its internal review. (MarketWatch) Just last week, Credit Suisse reported a relatively small $1.8 billion in write-downs for all of 2007. “To announce this just a week after reporting earnings is a major blow,” said WestLB analyst Georg Kanders in Duesseldorf. “This will again put the whole sector under pressure.” (Bloomberg)
High-definition DVD war ends, with Blu-ray the victor
Toshiba said it will cease to make, market, or sell its HD DVD format, leaving Sony’s Blu-ray as the winner of a multi-year battle between the rival technologies. (AP in Yahoo! Finance) The move follows a string of high-profile defections from HD DVD last week, including Wal-Mart, Best Buy, and Netflix. The final straw was Warner Bros. decision last month to use Blu-ray for all its new high-definition DVD releases, joining four other major movie studios. (The Boston Globe) The dueling formats kept buyers from the market, but “with a single format, consumers may be more willing to buy high-definition DVD players,” said analyst Akio Mizutani at Mizuho Corporate Bank in Tokyo. (Bloomberg)
Wal-Mart tops $100 billion in sales
Wal-Mart, the world’s largest retailer, reported a 3.8 percent rise in quarterly profits, to $4.1 billion, roughly in line with analysts’ forecasts. Sales rose 8.3 percent, to $106.3 billion, bolstered by 18 percent international growth. (AP in Yahoo! Finance) After a largely unsuccessful venture into fashion-conscious clothing, Wal-Mart expanded sales by offering discounts on groceries, early holiday sales, and a bigger selection of consumer electronics. “It’s wise that Wal-Mart’s adopted this approach to stay focused on providing solid value in the basics,” said Peter Sorrentino at Huntington Asset Advisors in Cincinnati. (Bloomberg)
Misery loves online company
Some people are finding company in the misery of being laid off, especially in tech-centric Silicon Valley, as social communications technology makes what is traditionally a private setback into a quasi-public event. This can be good for moral support, but it can also bring job leads. Ryan Kuder became a minor celebrity when, after getting a pink slip, he broadcast his last day of work via social movement tracker Twitter. More than 400 well-wishers worldwide followed his postings. “This is something that used to be shared over the dinner table,” said technology forecaster Paul Saffo. “Now the whole world can watch and participate.” (Los Angeles Times, free registration)
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