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BUSINESS BRIEFING

Saturday, January 24, 2009

MANUFACTURING

GE Profit Slides 46 Percent

General Electric posted a 46 percent drop in fourth-quarter earnings and warned of a tough environment this year as it struggles with its ailing finance business.

After paying preferred dividends, GE's earnings totaled $3.65 billion for the three months ended Dec. 31, down from $6.7 billion a year earlier. Revenue slipped 5 percent, to $46.2 billion. The results included $1.5 billion in charges from a restructuring of GE Capital.

GE, which makes everything from turbines to light bulbs, reaffirmed plans to pay its $1.24 dividend and defend its top "AAA" rated credit. But investors remain worried about how the company would maintain both and keep up growth in its industrial businesses.

For all of 2008, GE earned $17.3 billion, down 22 percent from a year earlier. Revenue grew 6 percent, to $183 billion.

EXECUTIVES

Intel Chairman Barrett to Retire

Intel said its chairman, Craig Barrett, plans to retire in May after more than three decades with the chipmaker. Barrett, 69, who served seven years as the company's chief executive until 2005, in recent years has become one of the industry's most high-profile advocates of bringing technology to Third World countries.

The Santa Clara, Calif.-based company said Jane Shaw, a former pharmaceutical industry executive who has served on Intel's board sine 1993, will replace Barrett. Intel is the world's largest semiconductor company.

MEDIA

Post Co. Records Write-Down

The Washington Post Co. recorded a $70 million goodwill write-down on the value of its CourseAdvisor subsidiary, according to Securities and Exchange Commission filing. CourseAdvisor, purchased in 2007, is a Web site where higher-education companies advertise. One of its customers is Kaplan Inc., The Post Co.'s education unit. The ongoing recession has reduced the value of many businesses, and the CourseAdvisor write-down reflects its diminished worth on The Post Co.'s balance sheet going forward.

The Post Co. has not disclosed CourseAdvisor's purchase price but did say it is not writing down CourseAdvisor completely, meaning it still carries value. In October, The Post Co. reported a $60 million write-down in the value of its Everett (Wash.) Herald and community papers.

ENERGY

EPA Delays Approval of Coal Plant

The Environmental Protection Agency placed a hold on approval of a coal-fired power plant in South Dakota, a move environmental groups say indicates increased scrutiny under President Obama.

"This is a signal that the Obama administration is taking a much harder look at coal power from the previous administration," said Darrell Gerber, a program coordinator at Washington-based Clean Water Action, which along with the Sierra Club opposed the plant.

The EPA said in a letter to the South Dakota Department of Environment and Natural Resources that the state didn't meet requirements under the Clean Air Act in part of its proposed permit for the plant. The state has 90 days to respond to the agency's objections.

BANKING

Regulators Close Calif. Bank

California regulators closed 1st Centennial Bank and appointed the Federal Deposit Insurance Corp. as receiver. 1st Centennial had assets of $803.3 million and deposits of $676.9 million.

The FDIC said 1st Centennial's insured deposits will be assumed by First California Bank. Its six branches will reopen Monday as offices of First California. First California also will buy about $293 million of the failed bank's assets; the FDIC will retain the rest for eventual sale.

The FDIC estimated that 1st Centennial will cost the deposit insurance fund $227 million.

EARNINGS

Xerox's fourth-quarter profit plunged 99 percent, to $1 million from $382 million, as it booked hefty charges for layoffs and other restructuring costs. The printer and copier maker also blamed fast-moving exchange rates for denting its profit margins even as the global downturn hurt sales of new printing equipment. For the full year, profit fell 80 percent, to $230 million from $1.14 billion. Revenue was up 2.2 percent, to $17.61 billion.

Schlumberger reported a 17 percent drop in fourth-quarter profit and said it will cut 5,000 jobs. The oilfield services company earned $1.15 billion, compared with $1.38 billion in the year-ago period. Revenue rose 10 percent, to $6.87 billion. For the year, Schlumberger said profit rose 5 percent, to $5.43 billion. Revenue increased 17 percent, to $27.16 billion.

Harley-Davidson said fourth-quarter profit fell 58 percent compared with the same period a year earlier, to $77.8 million. Revenue fell 6.8 percent, to $1.29 billion. For the full year, profit fell 30 percent, to $654.7 million. Revenue for the full year decreased 2.3 percent, to $5.59 billion. The company said it plans to cut 1,100 jobs and close three facilities to save at least $60 million a year.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.

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