NEWS AT A GLANCE
Starbucks sets big store and staff cuts
Coffee giant Starbucks said it will close 600 company-operated stores in the U.S., including 100 closures announced in January, as the slowing economy and store saturation hit at its bottom line. About 12,000 employees, or 7 percent of Starbucks’ global workforce, will be cut or moved to another location. (AP in Yahoo! Finance) Starbucks has doubled in size since 2004, and 70 percent of the targeted stores are less than three years old. They were siphoning 25-30 percent of sales from nearby Starbucks locations, the company acknowledged. “They’re basically the victim of their own success,” said Oppenheimer & Co. analyst Matthew DiFrisco, and now “they’ve admitted that.” (Bloomberg)
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UnitedHealth settles suits, lowers forecast
UnitedHealth Group, the largest U.S. health insurer, cut its earnings forecast for the second time this year, and said it will pay $912 million to settle two class-action lawsuits concerning stock option backdating. UnitedHealth blamed the earnings warning on an “intensely competitive” health care benefits industry and lower-than-expected margins from the Medicare prescription drug program. (MarketWatch) The company now expects full 2008 adjusted profit to be $2.95 to $3.05 a share, compared with an average analyst forecast of $3.52. (AP in CNNMoney.com) The lowered forecast doesn’t include the payouts from the legal settlements. (Bloomberg)
Microsoft explores new joint bid for Yahoo
Microsoft is in talks with Time Warner, News Corp., and other firms about buying and dividing up Yahoo, The Wall Street Journal reported. In the deal, Microsoft would buy Yahoo’s search business. Yahoo’s stock dipped below $20 a share yesterday for the first time since Microsoft announced a hostile bid in January. (MarketWatch) Its shares rose 3.5 percent in Germany, to the equivalent of $20.90 a share, on the report of Microsoft’s renewed interest. (Bloomberg) Meanwhile, the U.S. Justice Department opened a formal antitrust investigation into Yahoo’s ad deal with Google, the fruit of Microsoft’s bid. (The Washington Post, free registration)
For airports, profit in a layover
Airline passengers generally dislike flight delays, but airports don’t share the negative feelings. Airports have turned the ever-growing number of delays into another revenue stream, through a combination of old and new services for stranded passengers. Delays are so long now, for example, that grounded fliers can often watch an entire DVD between flights, for a rental fee. And with airlines cutting food service, passengers have more reason to visit the airport food court, or bar. Sales at U.S. airport shops, restaurants, and bars rose to $6.5 billion last year, from $6.1 billion in 2005. The “forced” time at aiports is “much, much longer” now, says airline consultant Robert Mann Jr. “We’re talking hours longer.” (CNNMoney.com)
