J.C. Penney Profit Slumps
J.C. Penney reported a large drop in fourth-quarter earnings as customers sharply cut spending on clothing and other items. The results beat Wall Street expectations, but the chain projected a wider first-quarter loss than analysts had predicted.
J.C. Penney said profit for the three-month period ending Jan. 31 fell 51 percent from the comparable period a year ago, to $211 million. Sales fell 10 percent, to $5.76 billion. For the whole fiscal year, profit fell 49 percent, to $567 million. Sales for the year fell 7 percent, to $18.5 billion.
Department stores have been among the hardest hit retailers in the recession as shoppers have focused on necessities. But Penney hasn't yet resorted to widescale layoffs -- unlike Macy's, which announced this month that it will cut 7,000 jobs, almost 4 percent of its workforce.
Lowe's Earnings Down 60 Percent
Lowe's said its fourth-quarter profit fell 60 percent, to $162 million from $408 million in the comparable period a year earlier, as the dismal housing market continued to weigh on results at the home-improvement chain. Revenue fell 4 percent, to $9.98 billion.
To cope with the worsening recession, Lowe's said it was further cutting back the number of stores it plans to open in 2009 and offered a profit forecast for the year that was short of Wall Street's expectations.
For the full year, Lowe's said profit fell 22 percent, to $2.2 billion. Revenue fell by less than 1 percent, to $48.2 billion.
Calif. Video Game Law Voided
A federal appeals court struck down a California law that sought to ban the sale or rental of violent video games to minors. The U.S. Court of Appeals for the 9th Circuit ruled that the 2005 law violates minors' rights under the Constitution's First and 14th amendments. The three-judge panel's unanimous ruling upholds an earlier ruling in U.S. District Court.
The law would have prohibited the sale or rental of violent games to anyone under 18. It also would have created strict labeling requirements for video game manufacturers. In a written opinion, Judge Consuelo Callahan said there were less restrictive ways to protect children from "unquestionably violent" video games. For example, the justices said the industry has a voluntary rating system and that parents can block certain games on video consoles.
The law's author, state Sen. Leland Yee, said he wants Attorney General Jerry Brown to appeal the decision to the U.S. Supreme Court.
UBS Shares Slide on Probe News
Shares of UBS plunged more than 14 percent, to $9.36, in Zurich trading, amid concern over an ongoing tax evasion case in the United States.
Thursday's news that UBS and Swiss authorities agreed to give Washington the names of 250 to 300 suspected tax cheats raised fears that the country could lose the prosperity born of lucrative banking secrecy.
On Friday, Switzerland's administrative court said UBS should not have handed over banking data of some alleged tax cheats to U.S. authorities. The court ruled temporarily on an appeal by eight account holders against the hand-over of their data, and the ruling applied only to those who brought the appeal.
Treasury Told to Release Records
A federal judge has ordered the Treasury Department to give Fox Business Network records about how the agency spent billions of dollars of bailout funds.
The network filed requests under the Freedom of Information Act for records related to money spent on American International Group, Bank of New York Mellon and Citigroup. The network specifically asked the department to identify the troubled assets purchased, any collateral extended and any restrictions placed on the financial institutions for their participation in this program.
Regulators Seize Oregon Bank
Regulators closed Silver Falls Bank in Silverton, Ore. -- the 14th federally insured institution to fail this year, and the second based in Oregon.
Silver Falls Bank, a community bank that opened in May 2000, had $131.4 million in assets and $116.3 million in deposits as of Feb. 9. Citizens Bank of Corvallis, Ore., is assuming Silver Falls Bank's deposits. It also is taking over its three branches and buying about $13 million in assets, including cash, securities and overdraft loans.
The Federal Deposit Insurance Corp., appointed receiver of Silver Falls Bank, will retain the bank's remaining assets. The FDIC estimated that Silver Falls Bank's failure will cost the federal deposit insurance fund $50 million.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.