Business Notes
Staff -- TWICE, 9/17/2001
CompUSA Stock Transaction To Allow Strength, Flexibility
DALLAS — Looking to achieve greater financial and operating efficiencies, Grupo Carso, S.A. de C.V. and Grupo Sanborns, S.A. de C.V. said they have initiated a procedure under which all shares of CompUSA held by GSanborns will be transferred to a new listed holding company. GSanborns owns 51 percent of the capital stock of CompUSA. As a result, shareholders of both GCarso and GSanborns will receive shares of a new company whose assets will consist essentially of 51 percent of CompUSA's shares, plus $200 million. Hal Compton, CEO of CompUSA, said "This is a very positive event for CompUSA and a tremendous vote of confidence from our parent company. It will allow us the strength and flexibility to achieve many of our goals." The definitive CompUSA controlling entity will now be able to manage and invest in the retailing sector within the United States, with no financial liabilities, and a healthy cash position to develop and support its operation. CompUSA will continue to focus on its U.S. chain retail business.
Nokia Lowers Expectations, Sees 5% Decrease in Q3 Sales
HELSINKI, FINLAND — Mobile phone maker Nokia expects revenue for the third quarter to be about 5 percent lower than the third quarter of last year. This compares with the company's earlier expectations of zero to 5 percent year-over-year growth. However, Nokia still expects to reach the third-quarter profit estimate it made in mid-July. Revenue at Nokia Mobile Phones is expected to be about the same level as the third quarter of 2000. The company said its phone business has been able to maintain healthy margins, even in the seasonally weaker third quarter, and that phone demand is showing signs of picking up in the United States. Based on developments during the first two months of the current quarter, third-quarter pro forma operating margin for the Nokia Group is expected to be in the mid-teens. The company will report third-quarter financial results on October 19.
Ericsson Addresses Mobile Phone Opportunities, Challenges
STOCKHOLM, SWEDEN — Mobile phone maker Ericsson said it expects to continue to grow its core mobile systems business at least in pace with the market, with flat to moderate growth for the year, as well as for 2002. "The market may look tough right now, and that is why we have taken necessary actions to return to profitability — even in these difficult times," said Kurt Hellstrom, president/CEO. "When it comes to the fundamental drivers for our industry, we see no reason to change our positive view for the longer term. The number of mobile subscribers continues to grow, with 50 million to 60 million new subscribers every quarter," said Hellstrom. General Packet Radio Service (GPRS) is starting now. The technology is in place, the networks are stable and handsets are in the market. My firm belief is that GPRS will accelerate over the rest of this year and next year, and that we are on track for volume deployment of 3G (third generation) in 2003."
Kenwood To Cut More Jobs, Looks To Hasten Return To Black
TOKYO — Audio equipment maker Kenwood, in a bid to cut costs and increase efficiency as it speeds up a return to profitability, is stepping up job cuts and issuing nearly $60 million in new shares. The company said it will cut 2,000 workers, about 20 percent of its total employment, by March 2004, instead of the 1,700 initially planned. About 1,200 employees will be let go by next March, an increase of 200 from the figure announced last May. Kenwood said it will issue new shares through a third-party allocation to help finance its business plan.
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