January 11, 2008 in Business

Delta soars on talk of combination

The Spokesman-Review
 

Shares of Delta Air Lines Inc. soared more than 18 percent Thursday following renewed speculation that the nation’s No. 3 carrier may be close to inking a deal to combine with another airline.

Delta shares rose $2.46 to close at $15.98.

The surge followed a nearly 15 percent rise in Delta’s stock on Wednesday.

On Wednesday, the head of the Atlanta-based company’s pilots union said in a letter to rank-and-file members that a combination involving Delta may be close.

Lee Moak, chairman of the union’s executive committee, said in the letter that “consolidation may indeed be at our door.”

He added later in the letter, “While the bankruptcy threat is now behind us, the potential for a consolidating event is every bit as real.”

In November, Delta denied reports that it was talking to UAL Corp.’s United Airlines about a combination. Since then, it has said little about the issue. Some analysts have suggested recently that a Delta-Northwest combination may be possible.

Microsoft Corp. said Thursday that Jeff Raikes, the top executive in its business software division, will retire in September.

Stephen Elop, chief operating officer at networking equipment maker Juniper Networks Inc., will replace Raikes, the software maker said.

Raikes, 49, was recruited to Microsoft from Apple Inc. by Chief Executive Steve Ballmer in 1981. Raikes was named president of Microsoft Business Division in 2005. Since then, he has been responsible for a wide swath of some of Microsoft’s most profitable applications, including the Office suite, Microsoft’s server software and applications that help businesses track customers and business processes.

Department store operator Kohl’s Corp. lowered its fourth-quarter profit expectations on Thursday, saying bigger holiday and post-holiday discounts and efforts to reduce inventory hurt the company’s sales.

Kohl’s said its same-store sales for the five weeks that ended Jan. 5 dropped 11.4 percent due to more discounts and one less week in the comparable period a year earlier. Adjusting for the extra week, Kohl’s said same-store sales declined 0.7 percent from the comparable period a year earlier.

Analysts had expected same-store sales to drop 8.4 percent, according to a survey by Thomson Financial.

The Menomonee Falls-based retailer said it now expects earnings to be between $1.30 per share and $1.34 per share.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email