BUSINESS BRIEFS
Industrial output falls 0.7% in April
Associated Press
WASHINGTON — Industrial output plunged in April as factories making everything from autos to heavy machinery felt the adverse effects of the weak economy.
Analysts held out hope that production will revive in the second half of the year, helped by the government's economic stimulus checks.
Industrial production dropped 0.7 percent last month, the Federal Reserve reported yesterday, more than double the decline that economists had expected.
Manufacturing output dropped 0.8 percent, with half of that weakness coming from large cutbacks in auto production.
BANKS RESPONSIBLE FOR RISKS, FED SAYS
WASHINGTON — Commercial banks and other financial institutions need to beef up their ability to detect and protect themselves against risks like the credit and mortgage debacles, Federal Reserve Chairman Ben Bernanke said yesterday.
The trio of crises — housing, credit and financial — have exposed weaknesses in financial firms' so-called risk-management practices. That is their ability to sufficiently detect and hedge against risks.
Banks and other financial players have racked up multibillion-dollar losses when investments in complex mortgage-backed securities soured with the collapse of the housing market.
CBS TO BUY CNET FOR $1.8 BILLION
NEW YORK — Media and entertainment company CBS Corp. is buying CNet Networks Inc., an online news and information provider, for $1.8 billion in cash in its latest bid to expand its reach on the Internet, the companies announced yesterday.
The price of $11.50 per share represents a massive premium of 45 percent over CNet's closing stock price on Wednesday, and appears to get CNet out of a nasty battle with one of its largest shareholders, which had been agitating for a shake-up at the company after its stock slumped.
The CNet acquisition is the largest since the company brought on the technology executive Quincy Smith in late 2006 to lead its digital strategy.
BLOCKBUSTER POSTS $42.6M PROFIT
DALLAS — Blockbuster Inc. said yesterday it swung to a first-quarter profit on lower expenses and improved domestic sales, bolstering the movie rental company chairman's belief that a turnaround plan is working.
The Dallas-based chain said its earnings after preferred dividends totaled $42.6 million, or 20 cents per share, in the three months ended April 6. That compared with a loss of $51.8 million, or 27 cents per share, a year earlier.
A 2.9 percent increase in same-store sales in the U.S. included a jump of nearly 20 percent in merchandise sales, the sort of revenue the company had in mind when it proposed last month to buy electronics retailer Circuit City Stores Inc.
PROFITS PLUNGE AT DEPARTMENT STORES
MILWAUKEE — Department store stalwarts J.C. Penney Co., Nordstrom Inc. and Kohl's Inc. all reported steep drops in first-quarter profits yesterday as Americans snubbed apparel to focus on basic necessities at discounters in a challenging economy.
The three department store chains all predicted the softening sales environment would continue this year, as consumers grapple with soaring food and fuel costs.
SOME FLIERS SPARED UNITED FUEL CHARGE
CHICAGO — Passengers booking flights on United Airlines got a one-day reprieve from paying the carrier's fast-rising fuel surcharge due to what United says was an error.
The mistake saved lucky customers as much as $130 per round trip on United's domestic flights — the maximum the airline charges for its fuel surcharge.
United spokeswoman Robin Urbanski says the fuel surcharge was inadvertently eliminated for domestic flights booked yesterday due to a clerical error. The mistake was rectified last night.
Urbanski says any customer who booked a flight without the usual surcharge will not be charged for it later.
