NEWS AT A GLANCE
One actors’ union settles, the other holds out
The American Federation of Television and Radio Artists reached a tentative labor agreement with Hollywood studios, leaving the larger Screen Actors Guild the only major Hollywood union without a contract. AFTRA opted to negotiate separately from SAG this year, for the first time in 27 years, after scuffles over turf issues. (AP in BusinessWeek.com) The AFTRA contract largely follows the template hammered out by the writers’ and directors’ guilds, raising wages across the board and adding payments for online content. With doubts surrounding the SAG contract, which ends June 30, the studios have largely stopped approving projects that can’t wrap up by that date. (Los Angeles Times, free registration)
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Sears posts unexpected loss
Sears Holding Corp., the largest U.S. department store chain, reported an unexpected $56 million quarterly loss. Sears, which owns Sears and Kmart, blamed a tough retail environment and strong competition from a variety of stores, including Wal-Mart, Kohl’s, Target, and Home Depot. (Reuters) Same-store sales fell 8.6 percent, the latest in an uninterrupted chain of drops since Chairman Edward Lampert combined Kmart and Sears in March 2005. “Sears is in a very tough spot right now,” said Scott Rothbort of Lakeview Asset Management. “A lot of their product lines right now are squarely in the middle of the economic slowdown.” (Bloomberg)
Costco profits up in a down economy
Costco Wholesale, the largest U.S. warehouse club retailer, reported a stronger-than-expected 32 percent rise in quarterly profit, to $295.1 million. Total sales rose 13 percent, to $16.26 billion, and same-store sales were up 8 percent. (MarketWatch) Costco and fellow warehouse chains Sam’s Club and BJ’s Wholesale Club have done well in the economic downturn, as price-conscious consumers have turned to the stores for cheaper food and gas. (Reuters) The 20 percent rise in gas prices and the favorable foreign exchange rates helped boost profits. Of Costco’s 538 locations, only 394 are in the U.S. (The Wall Street Journal, paid subscription)
Nokia’s shrewd Africa bet
Nokia is betting that Africans, faced with the choice between corn—now at an 11 year high—and a mobile phone, will often chose the phone. And it could well be right. Sales of mobile handsets were up 37 percent in Africa in the first quarter, to 33 million, which is pretty close to the 37.9 million sold in North America. Africa is the fastest-growing cellphone market, and Nokia already claims 55 percent of sales in the region. But it is aiming higher, looking to repeat its success in China and India, now its two largest markets. “People in emerging markets spend disproportionate amounts” of income on mobile phones, said Strategy Analytics analyst Neil Mawston, and they “are likely to continue to do so.” (Bloomberg)
