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Wal-Mart Completes Seiyu Takeover; Cathay Pacific Builds Own Terminal; Tsakos Profit Sinks; Court Rules in Favor of PDVSA; Delta Grounds Planes, Cuts Jobs; GameStop Scores Big; Weak Dollar Means Smaller Sets; SocGen Rogue Trader Freed
- Wal-Mart Stores Inc. (WMT) will purchase the remaining 4% of Japanese retailer Seiyu Ltd. (PINK:SYLTF), the Associated Press reported yesterday (Tuesday). Seiyu has 400 stores across Japan. Wal-Mart first purchased a share in the retail chain in 2002 and since then has been steadily increasing its stake. Wal-Mart feels buying the last 4% will give it the control it needs to turnaround what has to date, proven to be an unprofitable market for the retail giant.
- Cathay Pacific Airways Ltd., Asia's third-largest air-freight carrier, will invest $618 million (HK$4.8 billion) to build a cargo terminal at Hong Kong airport to help handle China's huge need air-freight traffic due to record exports, Bloomberg News reported. Cathay decided to build its own terminal to cut costs as competition from other freight carriers including Singapore Airlines Ltd. and FedEx Corp. (FDX) heats up.
- Greece-based Tsakos Energy Navigation Ltd. (TNP) reported lower fourth quarter income as a weak dollar increased costs. The freight company, which mainly transports oil and gas, reported net income of $52.2 million, or $1.36 per share for the current quarter, including a one-time gain of $30.8 million from the sale of a vessel. It earned $77.1 million, or $2.02 a share, for the same period the year prior, Reuters reported.
- A U.K. court yesterday (Tuesday) lifted a $12 billion asset freeze of Venezuelan energy company Petroleos de Venezuela SA, also known as PDVSA. The assets had been frozen since January as Exxon Mobil Corp. (XOM) sought legal recourse against the nationalization of its assets by President Hugo Chavez, Reuters reported. The ruling was the "best-case scenario for Venezuela and PDVSA. We expected at a minimum the injunction would be reduced, but to have it vacated is clearly even more bullish," Lehman Brothers Holdings Inc. (LEH) analyst Gianfranco Bertozzi said in a note to clients.
- U.S. air carrier Delta Air Lines Inc. (DAL) will reduce capacity and cut jobs, Chief Financial Officer announced yesterday (Tuesday). Delta, the third largest domestic carrier, will ground 20 mainline aircraft and as many as 25 regional jets, which will reduce capacity by 10%. The carrier will also cut 2,000 jobs in response to crippling jet-fuel costs, Bloomberg News reported. The struggling carrier, which has not been able to reach a merger agreement with Northwest Airlines Corp. (NWA) will also offer voluntary retirement to 30,000 employees, Reuters reported.
- Grapevine, Tex.-based GameStop Corp. (GME), the largest national video game retail chain, reported earnings yesterday (Tuesday) that beat expectations. For its fiscal fourth quarter, net earnings rose to $129.8 million, or 81 cents per share, up from net income of $85.0 million, or 55 cents per share, for the same period a year prior, CNBC reported. Analysts' estimates had expected earnings of 80 cents per share. Strong sales were attributed to popular titles such as the "Guitar Hero" line.
- Japanese television manufacturers will focus on smaller sized models, MarketWatch reported. Citing waning consumer demand for large-screen TVs and a weak dollar, a report in the Nikkei Business Daily stated that firms such as Sharp Corp. (OTC:SHCAY), Sony Corp. (SNE) and Matsushita Electric Industrial Co. (MC) would focus more on models in the 26-inch to 40-inch range.
- Jerome Kerviel, the rogue trader responsible for over $7 billion in losses at French bank Societe Generale SA (OTC:SCGLY), was released from jail yesterday (Tuesday). He had been held for five weeks since SocGen reported the losses due to unauthorized trades. Kerviel's movements are restricted and he is still under formal investigation for breach of trust, computer abuse and falsification, Reuters reported