Business briefing, May 14

Rocky staff and wire reports

Tuesday, May 13, 2008

NATIONAL

Fed chief says efforts to ease credit crisis seem to be paying off

Turmoil in financial markets has eased somewhat, but the situation is still "far from normal," Federal Reserve Chairman Ben Bernanke said Tuesday.

The central bank has taken unconventional steps - especially since March, when the credit crisis intensified - to help squeezed banks and big investment firms overcome problems and try to get credit flowing more freely again.

Those efforts appear to be paying off and "have contributed to some improvement in financing markets," the Fed chief said in prepared remarks delivered via satellite to a financial markets conference sponsored by the Federal Reserve Bank of Atlanta in Sea Island, Ga.

SPAMALOT The popular online hangout MySpace has won a $234 million judgment in Los Angeles over junk messages sent to its members.

MySpace says it believes this is the largest award ever under the 2003 federal anti-spamming law known as CAN-SPAM.

MySpace told The Associated Press that the award penalized two of the Internet's most prominent spam defendants, Sanford Wallace and Walter Rines.

FLIGHT CUTS U.S. Airlines, struggling with record fuel costs and a flagging economy, will fly 1.3 percent fewer passengers this summer as carriers cut the number of domestic seats to boost fares, a trade group forecast today.

The airlines will carry 211.5 million people from June 1 to Aug. 31, down from 214.2 million in the same period last year, James May, president of the Air Transport Association, told reporters in Washington.

WAL-MART Wal-Mart Stores Inc., the world's largest retailer, said Tuesday its profit rose 6.9 percent in its first quarter on higher sales as lower prices helped boost its results, topping Wall Street's expectations.

Wal-Mart earned $3.02 billion, or 76 cents per share, in the three months ended April 30, up from $2.83 billion, or 68 cents per share, a year earlier.

Analysts polled by Thomson Financial had projected earnings of 75 cents per share. The company had overall revenue of $95.30 billion, up 10.3 percent from $86.41 billion in the prior year. Net sales, excluding membership fees, rose to $94.1 billion from $85.4 billion a year ago.

Analysts projected revenue of $93.47 billion for the quarter.

JET BLUES JetBlue Airways Corp. is suspending plans to start serving Los Angeles International Airport, saying Tuesday the skyrocketing price of jet fuel is making the cost of starting service at a new airport unaffordable. JetBlue passengers who bought tickets to Los Angeles, where service was expected to start this month, are being rebooked on flights to nearby Long Beach Airport, which JetBlue already serves.

TAKEOVER BID Hours after saying it was open to holding talks, Corporate Express NV said Tuesday a sweetened $2.47 billion hostile takeover bid from its larger office products rival Staples Inc. is still too low.

Despite a 10 percent hike above the initial buyout proposal rejected in February, the latest bid "still significantly undervalues the business of Corporate Express," the Netherlands-based firm said after its supervisory and executive boards met Tuesday.

CREDIT RATING Standard & Poor's Ratings Services on Tuesday lowered its corporate credit rating on The Sports Authority to B- from B, citing a downturn in performance.

Standard & Poor's said it also anticipates "there may be continued softness in operations and credit metrics could weaken further over the near turn," the agency said.

Englewood-based The Sports Authority, which went private in 2006, operates some 400 sporting goods stores in 45 states.

HONDA PRICES Honda Motor Co., Japan's second-largest automaker, may increase prices for its vehicles in North America and other markets to offset the higher cost of steel and other raw materials.

"We will definitely consider it," Yoichi Hojo, chief operating officer of Honda's business management operations, said in Tokyo.

Honda, which gets about 70 percent of its operating profit from North America, may follow Toyota and Nissan in boosting prices in the region.

KROGER PHARM Kroger Co., which owns King Soopers and City Market supermarkets in Colorado, is expanding its discount on generic drugs, offering 90-day prescriptions for $10 and covering more women's health medications.

Kroger says the discounts are available beginning Wednesday in all 1,900 of its in-store pharmacies.

LOCAL

Qwest employs new ad agency, campaign to 'Get in the Loop'

Qwest Communications has launched a new consumer advertising campaign, which will run in 16 markets, including Denver, in the company's 14-state residential service area.

"Get in the Loop" features customers sharing what they love about staying connected through technology offered by Qwest. The campaign was created by Draftfcb of Chicago, which recently replaced McClain Finlon Advertising, of Denver, as Qwest's ad agency.

NEW CEO Virtela, a Greenwood Village-based network and security services company, has appointed Steven R. King as its new president and chief executive. King has more than 25 years of experience in the information technology industry. Virtela employs about 200 people, roughly half in Colorado.

SMART GRID The Boulder Economic Council will host a Boulder Economic Summit from 7:15 a.m. to 1:15 p.m. Thursday at the University of Colorado. Dick Kelly, CEO and president of Xcel Energy; Boulder Mayor Shaun McGrath; and Don Elliman, state director of economic development, will discuss plans for Boulder to be the nation's first energy-efficient "Smart Grid City."

Rocky staff and wire reports

THIS JUST IN . . .

* Dovetail Solutions added Colorado Educational and Cultural Facilities Authority and Studley as clients.

* The Mountain States Employers Council announced the winners of its Human Resources Best Practices awards: first place, Christian Living Communities; second place, Oppenheimer Funds; and third place, White Wave Foods.

* The Rotary Club of Golden will hold its Golden Ethics in Business Awards luncheon at the Denver West Marriott in Denver from 11:30 a.m.-1 p.m. May 23.

* OZ Architecture promoted Chad Holtzinger, Heike Kerbs, Elaine Kanelos Jensen, Liz Rane and Don Schieferecke to principal and Dan Miller, Jene Alie and Tom Hoover to associate principal.

* LeGrand Hart received a 2008 Gold Key "Silver Key" Award from the Colorado Chapter of the Business Marketing Association.

* Realtor Bill Delacruz joined the Boulder Market Center of Keller Williams Realty.

* Headwaters formed a Gaming, Hospitality and Leisure Group and hired James von Kreuter as a managing director.

* The Omni Interlocken Resort & Spa promoted David Harker to executive chef.

* The University of Colorado Technology Transfer Office announced grant awards to AKTIV-DRY LLC of Boulder, ApopLogic Pharmaceuticals LLC of Aurora, Copernican Energy Inc. of Boulder, EndoShape Inc. of Boulder, Locomotion Inc. of Boulder, Quest Product Development Inc. of Wheat Ridge and Tissue Genetics Inc. of Aurora.

* The Council of Real Estate Brokerage Managers, an affiliate of the National Association of Realtors, awarded Rita Greywood and Ceri Anderson the Certified Real Estate Brokerage Manager Designation.

* The Credit Union Associations of Colorado and Wyoming named Andrew Guthrie as association consultant and Debra Larrabee as government affairs administrator.

* FRII hired Scot Ganshert as engineering manager and Kathe Seeby as sales manager.

* United Launch Alliance named Jim Sponnick as Delta product line vice president and Mark Wilkins as Atlas product line vice president.

* AOR Inc. won five awards, including Best of Show, at the Business Marketing Association's Gold Key Awards ceremony.

* Chrysler LLC recognized Christopher Hall of Christopher's Dodge World in Golden as the 2007 Dealer of the Year in the Dodge brand category.

* Western Development Group opened its sales center at 2800 E. Second Ave. in Cherry Creek.

* John Gille, adjunct professor at the National Center for Atmospheric Research and the University of Colorado, received the 2008 George W. Goddard Award.

* The Credit Union Association of Colorado announced its 2008-2009 board members: Doug Ferraro, Mike Williams, Keith Cowling, Eva Gaudio, Charles Emmer, Sundie Seefried, Lynn Sutton, John Uchida, Bill Becker and Steve Pearson.

ECONOMY

Consumers, battling soaring gasoline prices and a slumping economy, cut back further on their spending in April.

The Commerce Department reported Tuesday that retail sales dipped 0.2 percent last month, right in line with economists' expectations.

It was the second drop in the past three months and was led by a 2.8 percent decline in auto sales, the biggest setback in this category in 10 months.

Excluding autos, retail sales rose by 0.5 percent, a better performance than had been expected as sales at general merchandise stores, a category that includes big chains such as Wal-Mart, posted a 0.5 percent increase. However, sales at department stores were down 0.1 percent, indicating that people may be seeking bargains at giant discount stores.

* Median home prices fell in two-thirds of the cities surveyed during the first three months of this year.

The National Association of Realtors reported Tuesday that median prices for existing single-family homes dropped in 100 of 149 metropolitan areas in the January-March period, while 48 metropolitan areas saw prices increase and one reported no change.