Wholesale Gains, French Banking Losses
Costco does well as the economy starts to do poorly. French bank Credit Agricole stumbles over the U.S. mortgage meltdown. And in a year of high-stakes politics, CNN has gotten a bit of its mojo back.
NEWS AT A GLANCE
Costco scores with bargain-minded shoppers
Warehouse-club retailer Costco Wholesale reported a 31 percent jump in quarterly profits, to $328 million, meeting analysts’ forecasts. (AP in Yahoo! Finance) Net revenue rose 12 percent as shoppers stocked up on bulk food in fewer trips to the store, amid higher gas and food prices. While many retailers have faltered in the recent downturn, Costco rivals like Wal-Mart’s Sam’s Club and BJ’s Wholesale Club have done well. (Reuters) BJ’s said today that its quarterly profits more than quadrupled, to $50.2 million, and February same-store sales rose 5.9 percent. (Dow Jones in CNNMoney.com)
Credit Agricole posts first post-IPO loss
Credit Agricole, France’s largest retail bank, reported a $1.3 billion loss in the fourth quarter, its first quarterly loss since becoming a public company in 2001. The loss included a greater-than-forecast $5 billion in writedowns tied to the global credit crunch and U.S. mortgage debacle. Credit Agricole shares rose in French trading, however, after the bank said it was raising its dividend by 4.3 percent. (Reuters) “It’s a disappointing set of results, but the market maybe feels that these are the last set of depreciations,” said analyst Clemence Bounaix at Richelieu Finance. “The market feels it can turn the page.” (Bloomberg)
Facebook poaches Google executive
Facebook hired Sheryl Sandberg, the head of Google’s key global advertising business, as its chief operating officer, in a blow to the newly embattled Internet search giant. (The New York Times, free registration) The defection helped send Google’s shares down 3 percent yesterday, to $440 a share—a 40 percent drop from November’s high of $741.79. (Los Angeles Times, free registration) Sandberg said Facebook reminded her of the smaller Google she joined six years ago. “While there is no comparison between Google and Facebook in revenue terms, Facebook, in terms of popularity and impact, has a very similar profile to the pre-IPO Google,” agreed Oppenheimer analyst Sandeep Aggarwal. (Reuters)
CNN’s fortunes rise amid gripping politics
The tight Democratic primary race may or may not be good for the Democratic Party, but it has certainly helped CNN. While all three cable news networks—CNN, Fox, and MSNBC—have seen ratings bumps during the primaries, CNN beat Fox among the coveted 25-to-54 age group in February, for the first time since 2001. The primary boost caps a four-year recovery at CNN, though, in which it doubled its profits, streamlined its management, and won some market share back from Fox. Facing a surging Fox, “I think they kind of got a little pompous” at CNN, said Brad Adgate at ad buyer Horizon Media. “I think they certainly have rebounded.” (The New York Times, free registration)
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