BUSINESS BRIEFS
Lowe's blames housing slump for 10.2% profit drop
Associated Press
CHARLOTTE, N.C. — Lowe's Cos. cited a weak sales environment amid a continuing slump in the housing sector yesterday as reasons for a 10.2 percent drop in third-quarter profit.
The nation's second-largest home improvement chain suggested an industry recovery won't occur in early 2008, either, as it slashed its outlook for the fourth quarter and the full year.
Its shares fell more than 7 percent yesterday after hitting a new 52-week low earlier in the day.
It's been a tough quarter for home-improvement retailers. Home Depot Inc., Lowe's bigger rival, reported a 27 percent drop in third-quarter earnings last week and cut its full-year outlook, citing the persistent housing slump.
CITIGROUP SHARES TAKE ANOTHER HIT
NEW YORK — Citigroup Inc.'s stock took another thumping yesterday after Goldman Sachs estimated the bank will take as much as $15 billion in writedowns over the next two quarters and recommended selling the stock.
Goldman analyst William Tanona also said Citigroup may have to cut its dividend to save money.
When Citigroup CEO Charles Prince stepped down Nov. 4, Citigroup said it expected to write down $8 billion to $11 billion in the fourth quarter, following a writedown of more than $6 billion in the third quarter.
SOME SEE TROUBLE FOR AUTO LOANS, TOO
DETROIT — Rising delinquency rates on car and truck loans have some industry analysts concerned that subprime mortgage troubles could spill into the automotive finance business.
In a note to investors yesterday, Lehman Brothers analyst Brian Johnson said his analysis of auto loan-backed securities sold by Ford Motor Credit Co. and GMAC Financial Services showed some higher delinquency rates for October and September compared with recent years.
"As unemployment remains low, this deterioration in the auto ABS credit conditions may be evidence of a likely spill over of the mortgage woes onto the auto credit world," Johnson wrote.
Spokeswomen for both Ford Motor Credit and GMAC said they experienced slight increases in delinquencies in the third quarter, but that those were unrelated to the subprime mortgage problems.
STRONG SALES PUSH HP PROFIT UP 28%
SAN JOSE, Calif. — Hewlett-Packard Co.'s fourth-quarter profit easily exceeded Wall Street's expectations, bolstered by surging laptop sales and continued strong demand for highly profitable printer ink.
The board of the Palo Alto-based computer and printer maker also authorized an additional $8 billion for stock buybacks, a sign the company believes its shares are undervalued.
HP's net income leaped 28 percent in the three months ended Oct. 31, rising from $1.69 billion, or 60 cents per share, to $2.16 billion, or 81 cents per share. Sales jumped 15 percent over last year to $28.29 billion, nearly $1 billion more than the $27.4 billion Wall Street was expecting.
Strong PC sales have fueled much of HP's growth. But printer ink continues to be the company's biggest cash cow.
FIRST DIVIDEND IN 6 YEARS FOR XEROX
NORWALK, Conn. — Xerox announced its first quarterly cash dividend in six years yesterday and predicted double-digit earnings growth in the coming years, citing new products and a stronger balance sheet.
A dividend of 4.25 cents per share will be payable Jan. 31 for shareholders of record on Dec. 31.
While the company doesn't release its share projections, it said the dividend would account for about 10 percent of its cash in the next fiscal year.
Shares of the printer and copier company rose 1.6 percent, or 26 cents, to $16.08 yesterday.
The announcement was another triumph for Chief Executive Anne Mulcahy, who took over the teetering Xerox in 2001, when it was loaded down by billions in debt and a huge accounting scandal.
