Industry report
Detroit Free Press April 17, 2003
APPLIANCES
Maytag to cut 500 jobs
Maytag Corp. announced plans to cut 500 jobs as the appliance maker reported a 39-percent drop in first-quarter earnings.
Benton Harbor-based Maytag said earnings for the three months ending March 31 were $34.5 million, or 44 cents per share, down from $56.8 million, or 73 cents per share in the first quarter of 2002. The consensus among analysts surveyed by Thomson First Call was for first-quarter earnings of 57 cents per share.
AUTOS
Lear earnings up; outlook poor
Lear Corp. said Wednesday its quarterly earnings jumped 46 percent, but it slashed its full-year outlook due to U.S. automakers' production cutbacks.
Lear, which makes seating, instrument panels, electrical components and other interior systems, is among the suppliers that have benefited most from an industry trend toward outsourcing the assembly of larger modules and systems.
The Southfield-based supplier said its first-quarter net income climbed to $67.9 million, or $1.01 a share, from $46.4 million, or 70 cents a share, in the same period a year ago, boosted by new business, a stronger euro and better operating efficiencies.
Analysts' consensus estimate was $1 a share, according to Thomson First Call.
Delphi profit rebounds
Delphi Corp. posted a quarterly profit of $127 million Wednesday, reversing a year-earlier loss due to restructuring charges.
Troy-based Delphi boosted its earnings despite an increase of about $120 million in employee benefit costs, including pension and health care, Delphi Chief Financial Officer Alan Dawes told Reuters.
A stronger-than-expected rise of 19.2 percent in sales to customers other than former owner General Motors Corp. helped results. Non-GM sales of $2.6 billion accounted for a record 37 percent of its total revenues of $7.2 billion.
5 vehicles pass crash tests
Five newly designed cars and sport-utility vehicles performed well in high-speed crash tests by the insurance industry, including a Cadillac sedan that was redesigned after it failed to win the highest rating.
The Insurance Institute for Highway Safety, which released the test results Wednesday, tested three SUVs and three luxury sedans by crashing each vehicle into a barrier at 40 miles per hour. The vehicles were angled so the driver's side got the brunt of the force.
Five vehicles that were newly designed for the 2003 model year received the highest rating. Those were the midsize Volvo XC90 SUV, the smaller Honda Element and Mitsubishi Outlander SUVs and the Cadillac CTS and Infiniti Q45 cars.
The sixth vehicle tested, the 2002 Acura RL, which was designed several years ago, received the second-highest rating of "acceptable." Insurance Institute President Brian O'Neill said the front of the Acura collapsed too far into the vehicle, damaging the legs of the crash-test dummy.
Environmental group targets Ford
An environmental group is urging the U.S. Justice Department to launch a criminal investigation of Ford Motor Co., accusing the automaker of hiding safety-related information from regulators and the courts.
The Environmental Working Group says its request is bolstered by a South Carolina case alleging that Ford paid an expert witness to change his testimony in a 1993 suit involving the Bronco II sport-utility vehicle.
Monday, the South Carolina Supreme Court ruled that the plaintiffs in that original case could sue Ford again because of the expert witness' testimony.
Kathleen Vokes, a Ford spokeswoman, rejected the Environmental Working Group's claims, saying they are based on incomplete information from court papers.
BANKS
Comerica profit declines 18%
Comerica Inc. said first-quarter profit fell 18 percent as the company wrote off more bad loans and lending income fell.
Net income dropped to $176 million, or $1 a share, from $214 million, or $1.20, a year earlier, the Detroit-based company said in a statement. That beat the 99-cents a share average estimate of analysts surveyed by Thomson Financial.
Comerica is writing off more bad loans and increasing its loan-loss reserve at a time when rivals such as Bank One Corp. and Wells Fargo & Co. recorded fewer loan losses. Comerica's customers are struggling through a weak economy and are having difficulty keeping up with loan payments, triggering more defaults.
BEVERAGES
Coke revenue up; stock falls
Soft-drink giant Coca-Cola Co. posted a jump in first-quarter revenue and a net profit Wednesday but reported weaker-than-expected sales in North America and many other markets, sending its shares down by more than 6 percent.
The world's No. 1 soft drink maker said it had been hurt by the war against Iraq, a lengthy national strike in Venezuela, a shift in the timing of the Easter holiday and other problems in its more than 200 markets around the world.
MANUFACTURING
Loss widens at Champion
Champion Enterprises Inc., the nation's leading builder of prefabricated homes, posted a wider net loss for the latest quarter Wednesday and said it doesn't expect to be profitable this year due to industry uncertainties.
Sales fell 21.5 percent to $209.2 million from $266.6 million. Champion said its quarterly revenue was off 64 percent from its peak in 1999.
The Auburn Hills-based company reported a net loss of $24.4 million, or 52 cents a share, for the first quarter that ended March 29, compared with a narrower loss of $11.8 million, or 25 cents a share, a year ago.
TECHNOLOGY
Apple not bidding for music unit
Apple Computer Inc. Chief Executive Officer Steve Jobs said the company has never made any offer to buy a big music company.
Vivendi Universal SA, the world's second-largest media company, said Apple might bid $6 billion for its Universal Music Group unit. Vivendi director Claude Bebear said in an interview that Apple "will probably make an offer for the music business, for about $6 billion."
Meanwhile, Apple said its net income fell 65 percent from a year ago as revenue was little changed. For its fiscal second quarter ended March 29, Cupertino, Calif.-based Apple said it had net income of $14 million, or 4 cents a share, compared with year-ago net income of $40 million, or 11 cents a share.
Revenue fell to $1.48 billion from $1.50 billion.
Analysts polled by tracking firm Thomson First Call had forecast Apple to post a profit, on average, of 2 cents a share, within a range of 1 cent to 4 cents, on revenue of $1.46 billion.
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