Business in brief: Investors take bite out of Apple
Investors lopped $15 billion off Apple Inc.’s market value Wednesday, punishing the company for a disappointing earnings outlook even as many technology stocks staged a comeback.
Fears about weakening consumer spending in the U.S. and a slowdown in iPod sales growth helped fuel a sell-off in Apple shares, which fell $16.57, or nearly 11 percent, to close at $139.07.
The stock had fallen nearly 20 percent in early trading but regained some ground during the day.
“The stock valuation probably got a little bit out of hand, so you’re seeing a reset in terms of the stock price and expectations,” said Shaw Wu, an analyst with American Technology Research. “But the big concern is with the iPod business.”
Cupertino-based Apple, whose stock had quadrupled in less than two years, topping $200 late in December, endured one of its worst one-day declines after offering a disappointing forecast for the fiscal second quarter of 2008. The sales forecast of $6.8 billion was roughly $200 million short of analyst estimates. The period covers the first three months of 2008.
Lower-than-expected sales of iPods loomed over the results. Many analysts were expecting Apple to sell 25 million iPods during the holiday quarter. Apple, however, sold 22.1 million
Yahoo in talks over MP3s
Yahoo Inc., is in early discussions with major record labels over offering unprotected MP3s either for sale or for free as part of an ad-supported service, two record company executives familiar with the talks said Wednesday.
The talks, held as recently as last month, were preliminary because Yahoo is still working out the details, said the executives, who requested anonymity because the discussions were confidential.
Yahoo hopes to launch the service this year, they said.
Universal Music Group, Sony BMG Music Entertainment, Warner Music Group Corp., and EMI Group PLC have in recent months begun licensing their music for sale as MP3 files online through retailers like Amazon.com.
Unlike music files that come with copy protections embedded, MP3 files are compatible with most portable music devices.
Ford to offer more buyouts
Ford Motor Co. is expected to offer a new round of buyouts to all of its 54,000 U.S. hourly workers, a move that could trim thousands of jobs and pave the way for lower-wage replacements.
Ford spokeswoman Marcey Evans confirmed Wednesday that the company and the United Auto Workers have reached an agreement under which the automaker could offer buyouts to UAW-represented hourly workers, but she wouldn’t give details. Earlier this month, however, Ford’s vice president of North American manufacturing Joe Hinrichs said any buyout offers would be extended to all of Ford’s hourly workers.
– From wire reports