NEWS AT A GLANCE
Lehman shops asset management unit
Lehman Brothers is shopping its prized asset management division around to private equity firms, as it seeks to raise billions of dollars to offset massive real-estate-related losses. The core of the asset management business is Neuberger Berman, which analysts estimate to be worth between $7 billion and $13 billion. (The New York Times) Lehman shares were hit yesterday by analysts’ concerns that the investment bank will report a third-quarter loss of up to $1.8 billion in September, its second straight loss. (AP in Yahoo! Finance) Separately, former IMF chief economist Kenneth Rogoff said today he expects a big U.S. bank to collapse in the next few months, as the financial crisis deepens. (Reuters)
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General Dynamics buys Jet Aviation
U.S. aviation and defense firm General Dynamics, the maker of Gulfstream jets and Abrams tanks, agreed to buy Swiss business-aviation services company Jet Aviation Management for $2.25 billion in cash. British buyout firm Permira Advisers owns Jet Aviation currently. The deal should close by year’s end. (Reuters) Gulfstream sales are booming, as the weak dollar fuels demand in Russia, Brazil, India, and China, pushing foreign orders above U.S. orders for the first time. Jet Aviation will bring General Dynamics further into global flight services for corporate aircraft, which include plane servicing and refurbishing and ground facilities at business air terminals. (Bloomberg)
Home Depot profit drops 24 percent
Home Depot, the world’s top home-improvement retailer, posted a better-than-expected 24 percent drop in quarterly profit, to $1.21 billion, on $21 billion in sales. (CNNMoney.com) Same-store sales fell 7.9 percent, as the company was hit by both the consumer-spending and housing slumps. Homeowners make up 70 percent of Home Depot’s sales, while the other 30 percent come from contractors and other professionals. (AP in Yahoo! Finance) Home Depot also said it expects a 24 percent drop in full-year profit. “The quarter held up better than we thought, but they’re still just as negative on the rest of the year,” said Morgan Keegan analyst Laura Champine. (Bloomberg)
U.S. car satisfaction is foreign, not home-grown
U.S. car buyers are growing more satisfied with their Asian and European auto purchases and less pleased with their U.S. cars, according to the annual customer satisfaction survey from the University of Michigan. The survey, released today, lists Lexus and BMW at the top of the satisfaction index, followed by Toyota and Honda in second place. The previous brands in the No. 2 slot—GM’s Buick and Cadillac and Ford’s Lincoln and Mercury—actually got poorer scores. In past years, U.S. brands grew, just not as fast as foreign ones. “This is somewhat of a double whammy,” said Michigan professor Claes Fornell. “The struggling companies are getting an even tougher road in the near future.” (AP in Los Angeles Times)
