Business Briefs, 06/23: Saab moves closer to bankruptcy; ConAgra doubles profits
Saab, the Swedish car company renowned for its sometimes quirky designs, moved closer to bankruptcy Thursday after it conceded that it didn’t have any money to pay employees’ wages. After months of production stoppages and problems with paying suppliers, Saab said the situation is so dire that it won’t be able to pay its 3,700 employees, raising doubts over how long the brand can survive.
Its Dutch owner Swedish Automobile, previously known as Spyker Cars, has courted Chinese and Russian investors and put the Saab factory up for sale in its attempts to revive the brand it took over from General Motors Co. last year.
ConAgra Foods doubles profit
ConAgra’s fourth-quarter net income more than doubled thanks to higher food prices and an insurance settlement.
But the company warned Thursday that first-quarter earnings may fall below last year’s numbers in what CEO Gary Rodkin calls a “challenging” market place.
ConAgra and other food producers have had to raise prices as higher ingredient and material costs cut into profits. This quarter, the company’s consumer foods segment saw cost inflation rise 9 percent.
The maker of Slim Jim, Healthy Choice, Chef Boyardee and other food products earned $254.9 million, or 61 cents per share, for the period ended May 29. That’s up from $90.6 million, or 20 cents per share, a year earlier.
Adjusted earnings from continuing operations rose to 47 cents per share from 38 cents per share, the company said Thursday.
Discover Financial Services on Thursday said its profit more than tripled in its fiscal second quarter as its customers used their cards more and got better about making payments on time. For the three months ended May 31, the Riverwoods, Ill.-based credit card company said net income available to common shareholders rose to $593 million, or $1.09 per share, compared with $185 million, or 33 cents per share, in the year-ago quarter.
Lennar’s net income dropped 65 percent in its second quarter compared with last year, when it logged a big tax benefit, and while the homebuilder delivered fewer homes, it still beat Wall Street expectations Thursday. For the three months ended May 31 — which is also the traditional spring home-selling season — Lennar earned $13.8 million, or 7 cents per share. That compares with $39.7 million, or 21 cents per share, a year ago.
Nissan is forecasting a 15.4 percent drop in profit for the fiscal year through March 2012 because of production disruptions from the March earthquake and an unfavorable exchange rate. But the Japanese automaker is expecting to sell more cars around the world, despite the disaster in northeastern Japan that battered production earlier this year at 4.6 million vehicles, up 9.9 percent on year — underscoring Nissan’s resilience.
Drugstore chain Rite Aid Corp. reported a smaller fiscal first-quarter loss Thursday as its sales held steady. The Camp Hill, Pa., said it lost $65.5 million, or 7 cents per share, in the three months ended May 28. A year ago it lost $76 million, or 9 cents per share. The company’s selling, general and administrative costs decreased, and sales at stores open at least a year improved.
Phillips-Van Heusen raises outlook
Phillips-Van Heusen Corp. raised its second-quarter earnings guidance Thursday, driven by strength in its Calvin Klein and Tommy Hilfiger businesses. The company now expects adjusted earnings per share of at least 95 cents, a 23 percent jump from a year earlier. On May 31, it predicted earnings between 93 and 95 cents per share.
Berkshire Hathaway adjusts price for Wesco deal
The final price Warren Buffett’s Berkshire Hathaway will pay for the 19.9 percent of Wesco Financial it doesn’t already own has been set at $545.4 million. The price announced Thursday is about $2 million less than the $547.6 million that Berkshire offered when the deal was announced in February. The price was adjusted downward mostly because the value of Wesco’s stock holdings declined.
Wesco shareholders will vote on the deal on Friday. Wesco’s board recommends it.
Berkshire owns a broad range of 80 subsidiaries. Pasadena, Calif.-based Wesco is a similar conglomerate but smaller and less diverse.
| The Star’s wire reports