BUS BRIEFS David defeats Goliath-Mart at own game
SAN FRANCISCO -- Wal-Mart Stores Inc. is handing off its online DVD rental business to Netflix Inc., signaling the world's largest retailer couldn't beat the Internet upstart at its own game.
Thursday's David-defeats-Goliath announcement boosted Netflix's shares, which gained 63 cents, or 4.1 percent, to close at $16.13 on the Nasdaq Stock Market. The shares shed 13 cents in after-hours trading, but soared as high as $19.27 earlier in the day.
Wal-Mart is offering its existing online DVD rental customers the chance to continue their subscriptions with Los Gatos-based Netflix at their current price for the next year. Those who don't sign up with Netflix by June 17 will lose their service. Wal-Mart plans to continue promoting the Netflix service on its Web site.
Gap's income tops expectations
SAN FRANCISCO -- Gap Inc.'s net income fell 7 percent because of slumping sales, but the results still topped Wall Street's expectations.
The San Francisco-based company said Thursday that it earned $291 million, or 31 cents per share, for the 13 weeks ended April 30. It earned $312 million, or 33 cents per share, in the fiscal first quarter of 2004.
Sales for the quarter totaled $3.6 billion, down 1 percent from $3.7 billion at the same time last year.
Analysts polled by Thomson Financial expected the retailer, which operates Gap, Banana Republic and Old Navy stores, to earn 30 cents per share on revenue of $3.63 billion.
Maytag Corp. to sell to investor group
DES MOINES, Iowa -- Maytag Corp. said Thursday it has agreed to sell the company to an investor group led by private equity firm Ripplewood Holdings LLC in a cash deal valued at $1.3 billion.
The deal values the appliance maker at $14 per share, and includes the assumption of about $975 million in debt.
Maytag shares soared more than 21 percent, or $2.44, in late trading on news of the acquisition, after closing 9 cents higher at $11.56 Thursday on the New York Stock Exchange.
The board of Newton, Iowa-based Maytag approved the transaction and said it will recommend company shareholders approve it. The sale is expected to close before year's end, pending regulatory and shareholder approval.
Jurors ask to review recordings of Scrushy
BIRMINGHAM, Ala. -- Jurors began deliberations in the fraud trial of Richard Scrushy on Thursday and quickly asked to review some of the prosecutors' most important evidence: secretly made FBI recordings of the fired HealthSouth Corp. chief.
The jury of seven men and five women -- split evenly between blacks and whites -- asked U.S. District Judge Karon Bowdre to listen to a pair of recordings of Scrushy's talks with former HealthSouth finance chief Bill Owens, who wore a hidden microphone for the FBI.
In one conversation that often dropped into hushed tones, Scrushy seemed to be urging Owens to sign financial statements despite Owens' angst over a possible divorce by his wife. In the exchange, Owens told Scrushy his wife was angry over what he had been doing at work.
More mixed messages on economy
NEW YORK -- The economy offered conflicting signs of growth on Thursday. While a closely watched gauge of future business activity fell for the fourth month in a row in April, job hunters got an encouraging cue when the number of new people signing up for unemployment insurance dropped sharply last week.
The Conference Board said its Composite Index of Leading Economic Indicators fell 0.2 percent last month to 114.5. The decline was in line with what analysts expected for the indicator, which is closely followed because it is meant to forecast the economy's health over the coming three to six months.
The April drop followed a revised 0.6 percent decline in March and a 0.1 loss in February.
Delta: Pilots must sacrifice again
COLLEGE PARK, Ga. -- Tough decisions may have to be made, but Delta Air Lines Inc. is committed to doing whatever necessary to achieve the remaining $1 billion of its targeted cost cuts, Chief Executive Gerald Grinstein said Thursday.
Grinstein said the nation's third-largest airline is on target to achieve $5 billion in annual cost savings by the end of 2006, though he did not specify what beyond its previous initiatives it will do to reach that goal.
The Atlanta-based company's meeting included a passionate speech from the head of its pilots' union about the sacrifices pilots made to save the company last fall from bankruptcy, a threat Delta again faces just seven months later. There also were frequent interruptions from a wealthy shareholder who has been outspoken at several different companies' annual meetings in recent years.