Daily Briefing

DAILY BRIEFING

November 19, 2008

AirTran Airways parent expects annual loss

The parent of discount carrier AirTran Airways expects to post a loss for this fiscal year, its first annual loss since 1999, an executive said yesterday. Chief Financial Officer Arne Haak said that the Orlando, Fla.-based carrier saw a reduction in demand in October as the financial markets declined. AirTran, the second-largest carrier at Baltimore-Washington International Thurgood Marshall Airport, has been adding new fees, cutting costs, selling aircraft and raising fares at times. Haak said the carrier might sell more aircraft if the economy worsens. Last month, AirTran reported that it swung to a $107.1 million third-quarter loss despite a double-digit rise in sales. For the first nine months of the year, AirTran's net loss was $155.4 million, compared with a profit of $54.9 million a year earlier.

UPS expects Dec. 18 to be peak shipping day

ATLANTA : UPS Inc. expects its busiest day overall for shipping packages this year will be Dec. 18. For the first time since it went public in 1999, the Atlanta-based company is not forecasting how many packages it will ship that day. UPS also will not project how many seasonal employees it will hire this year to help it through the holiday shipping season, which runs from Thanksgiving until Christmas. The decision was prompted by weak October retail sales and uncertainty about the holiday season amid the worst financial crisis to hit the U.S. in decades.

Associated Press

Home Depot profit falls 31 percent

CHICAGO : The Home Depot Inc., the nation's largest home improvement chain, said yesterday that its third-quarter profit sank by nearly a third as shoppers scaled back on items that ranged from custom kitchens to lumber and flooring. The company also forecast a steeper drop in full-year sales due to the still-challenging housing and home improvement markets that are vexing the industry. Home Depot's profit tumbled 31 percent to $756 million, or 45 cents per share. That's down from $1.09 billion, or 60 cents per share, in the same period last year. Revenue sank 6 percent to $17.78 billion from $18.96 billion.

Associated Press

October online spending up just 1% from year ago

NEW YORK: Online spending for October grew at the slowest pace since at least 2001, an Internet research company said yesterday - the latest evidence that Web shopping is being dragged down by the deteriorating economy. According to the comScore Inc. report, online spending increased a meager 1 percent last month from the year-ago period, marking the slowest sales pace for any month since the Chicago-based company began tracking the data seven years ago. The results exclude business from auctions, autos and travel. "While rising prices remained consumers' biggest concern in October, it's clear that the increase in the country's unemployment rate along with the shock of the financial market meltdown have had a negative impact on the psyche of the American consumer, and the effects were clearly felt in the online retail sector," comScore Chairman Gian Fulgoni said in a statement. Overall, online retail spending from August through October grew 4 percent compared with the year-ago period, with spending declining 3 percent among households making less than $50,000. Among households with income between $50,000 and $100,000, spending rose 1 percent, while those making at least $100,000 increased their spending by a robust 14 percent.

Associated Press

Saks 3Q loss is bigger than expected

NEW YORK : Luxury retailer Saks Inc. reported a bigger-than-expected loss for the third quarter yesterday as its affluent customers slashed their spending amid job losses on Wall Street and shrinking stock portfolios linked to the financial meltdown. New York-based Saks, which operates Saks Fifth Avenue, also issued a dim outlook, predicting deteriorating profit margins in the fourth quarter amid heavy discounting. It also plans to cut spring inventory by 15 percent and reduced its capital expenditures for next year by 40 percent. Its shares dropped almost 10 percent.

Associated Press

Oct. wholesale prices post biggest drop in 60 years

WASHINGTON: October wholesale prices experienced the biggest one-month drop on records that go back more than 60 years, illustrating the impact that falling energy prices and fears of a prolonged recession can have on inflation. Wholesale prices fell a record 2.8 percent last month, reflecting the fact that energy prices decreased by the largest amount in 22 years. After spending most of the year worrying about surging costs for energy, food and other commodities, analysts found it remarkable that prices could reverse so quickly. "Inflation is yesterday's problem," said Nigel Gault, chief U.S. economist at IHS Global Insight. He called the change "a testament to how suddenly the global economy's expansion has turned into recession." Economists said they did not believe the country would experience outright deflation, which was last faced in the U.S. in the 1930s when the nation suffered through the Great Depression and a long, debilitating bout of falling prices.

Associated Press

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