The head of AT&T on Thursday suggested that the company might sell its directory business, which employs more than 500 people in St. Louis.
The company also reported a $6.68 billion loss for the December quarter, fueled largely by a $4 billion cancellation charge paid after the failure of its planned purchase of T-Mobile.
But the loss also included a non-cash charge of about $2.9 billion to reflect the falling value of its directory business, which includes the Yellow Pages phone book and its Internet incarnation.
AT&T expects earnings per share to grow by a mid-single-digit percentage in 2012, a bit lower than analysts had expected.
In a morning conference call with analysts, AT&T CEO Randall Stephenson labeled the directory business as underperforming.
“That’s one area that we’re going to obviously take a very hard look at, and while I don’t want to give any indication on M&A activity, it’s one of these areas that we’re going to have to decide, do we keep it, do we restructure it, as we move forward,” he said. M&A means mergers and acquisitions, the buying and selling of companies.
AT&T declined to give any further details on the directory business presence in St guaranteed high risk personal loans. Louis, or the company’s intentions. It also declined to say how many people the business employed locally.
However, that business employs 575 union members in St. Louis, plus management personnel, said Jim Kolve, executive vice president of Communications Workers of America Local 6300. The local workers handle sales, accounting, customer service and part of production, working on both the print director and the Internet.
AT&T’s directory business is the most profitable in the industry, said analyst Juli Niemann of Smith Moore & Co.
“This was a cash cow feeding tons into the company,” she said.
The phone company might use money from the sale to fund upgrades of its phone system and build its video business.
“They have big debt and an underfunded pension,” Niemann said. “They need the cash.”
The directory business is part of AT&T’s Advertising Solutions unit, which reported quarterly revenue of $781 million versus $926 million a year earlier.
Associated Press contributed to this report
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Raw fish and cough medicine may not seem like they should occupy the same store, but a select few Walgreens now carry both.
In 2009 Walgreen Co., based in a Chicago suburb, announced it would elevate food offerings at some of its most prominent stores, in downtown Chicago, on Wall Street and elsewhere. Those stores – designed to trumpet that the century-plus-old pharmacy chain was entering new, more rarified terrain – now have sushi bars, $400 bottles of wine, cigar humidors and made-to-order smoothies.
But the company also promised it would fill more shelf space, including here in St. Louis, with cheaper, less esoteric offerings, especially in areas where low-income residents have little access to nutritious or fresh food. Walgreens plans to turn at least 500 of its 7,800 U.S. stores, most in low-income neighborhoods, into what the company is calling “food oases.”
“We found that in lower-income areas, in food deserts, that grocery stores have moved out,” said Bryan Pugh, the company’s vice president of merchandising. “It’s a very strategic initiative. Food brings the shopper in more often.”
So far the company has expanded offerings, including fresh produce, at a modest 35 stores in Chicago, Detroit, San Francisco, Oakland and Indianapolis. But it plans to expand to other cities over the next five years. The company aims to boost food offerings in some of its 110 St. Louis-area stores by 2013, Pugh said, noting that it has already rolled out new in-house food brands that are on store shelves already.
“We’re overhauling all our brands,” Pugh said.
Walgreens is not the only retailer who says it will bring fresh produce to under-served areas in St. Louis and beyond. Save-A-Lot stores have said they will open 500 stores in these neighborhoods in the five years, and Wal-Mart has made a similar commitment, saying it will open as many as 300 by 2016. But Walgreens already has a major presence in low-income urban areas, with stores already in place, making its efforts easier to execute, analysts note.
Walgreens’ move, analysts say, could help the company keep customers Walgreens is losing after the company’s split from pharmacy benefits manager Express Scripts. Walgreens stands to lose billions in sales as customers fill their prescriptions elsewhere.
“It’s really interesting timing, because Walgreens can re-establish themselves with people who can no longer fill their prescription there,” said supermarket analyst, Phil Lempert. “It’s: What can we sell them to keep them coming to our store, until they make the transition to Medicare?”
While Walgreens acknowledges that the move is strategic, it also says it has good intentions of providing fresh produce to nutrition-poor areas where fast food is usually the only source of calories. Nutritionists and critics, however, question how successful that effort could be.
“A lot of this is overblown,” said David Livingston, an analyst and supermarket industry researcher. “They already had some food items. They’re adding a few more. They’re adding a few more perishables. Are they really making a difference? I don’t think so.”
Walgreens says it will expand the space it devotes to food by 35 to 40 percent in some of its stores. But, Livingston notes, that translates to roughly 400 square feet. “That’s 20 by 20,” Livingston said. “That’s the size of my bathroom.”
Livingston and other analysts point out that grocery stores pulled out of these neighborhoods for a reason. “If there’s money to be made selling fresh produce, grocery stores would have figured it out,” he said. “I wonder what they’re thinking.”
Marjorie Sawicki, and assistant professor of nutrition and dietetics at Saint Louis University, said she believes Walgreens produce may make a small dent in nutrition-poor diets.
“Where we have food deserts, if there are fruits and vegetables, it might help, because there’s a Walgreens on every block,” Sawicki said. “If they displace items that are filled with sodium and fat, then it could have a benefit. It depends on how they emphasize the food.”
Bringing healthy food to under-served neighborhoods will require a more holistic approach, Sawicki says. “I think it’s a Band-Aid,” she said. “What we need to be looking at is creating community investment so people can access healthy food at a fair price and support the person who grew it. But that’s going to take time.”
Sawicki pointed to other efforts to bring produce to under-served areas, such as The North City Food Co-Op, as better models. Other new additions to the market landscape in St. Louis food deserts include YOURS Market, which opened in the Baden neighborhood in late 2010.
Still, Walgreens sees an opportunity.
The company did extensive research to determine which stores should sell more food. “Different stores have different trends,” Pugh said. “If I’m on a corner, near a Dominick’s, a Target and a Walmart , I’ll probably do better with beauty (products) there. I’ll look at my data by category and see if I’ve got traffic and I’m selling food. You can’t put fresh food in a store that’s not busy.”
The company’s plan, Pugh said, is not to expand the stores, but to devote more existing space to food. “We’re already in those areas,” he said. “We are the health care oasis there.”
Lempert says he believes that’s a smart strategy.
“I think it’s fascinating that for years drug chains had the lowest price for milk, that was their loss leader – what they did to get people in,” Lempert said. “Now they’ve leap-frogged milk, and said we can do this bigger and better.”
“We buy food 2.2 times a week, so if they can get more traffic in these stores, they sell more product,” Lempert added. “Supermarket sales are either flat or declining, and if you look at drug-store food sales, they’re through the roof.”
American employers stepped up their hiring in December, bringing the unemployment rate down again.
The economy added 200,000 jobs in the month, the Labor Department reported Friday, closing out the year with 1.6 million jobs gained in 2011. Only 940,000 jobs were added the year before.
Meanwhile, the unemployment rate fell to 8.5%, its lowest level since February 2009.
"This is a good solid report, and the big message here is that 2011 was much better than 2010," said Scot Melland, CEO of Dice Holdings, a provider of career websites. "We’re headed in the right direction."
The encouraging news was coupled with revisions to the Labor Department’s data going back five years, which showed the unemployment rate has fallen for four consecutive months.
While private businesses have been adding jobs consistently since March 2010, the government has been slashing payrolls. In December, private employers added 212,000 jobs, and the public sector cut 12,000 jobs.
Young workers getting hired again
The manufacturing, health care and education industries were all bright spots in December, each adding more than 20,000 jobs cheap business cards. Even the construction industry, which had been bleeding jobs the two prior months, hired another 17,000 workers.
Jobs in retail and the food services were also on the rise, as were positions for couriers and messengers. In spite of the Labor Department’s seasonal adjustments, some analysts caution that these positions could be related to holiday hiring.
Still, more than 13 million people remain unemployed in the United States, and 42.5% of them have been so for six months or more.
Overall, the job market has a long way to go to fully recover from the financial crisis. The economy still needs to add about 6 million jobs to get back to 2008 employment levels.
Were you falling out of the middle class even before the Great Recession hit? Are you better or worse off than your parents? Do you have a job but still feel you aren’t upwardly mobile? Email realstories@cnnmoney.com with your name and phone number, and you could be featured in an upcoming story on CNNMoney.
Spain’s new conservative government is about to unveil its first austerity measures as it embarks on an urgent mission to energize an economy saddled with shrinking output, sky-high unemployment and mountains of debt.
Prime Minister Mariano Rajoy is presiding over a Cabinet meeting Friday that will approve the first in what is expected to be a painful series of spending freezes or cuts and other reforms over the next few months.
Rajoy’s Popular Party won a sweeping victory in Nov. 20 elections over the discredited Socialists.
Like other troubled governments in Europe, Rajoy faces the delicate task of enacting growth-discouraging deficit reduction measures in a country whose economy is expected to contract in the last quarter of 2011 and the first of 2012.
London’s departing police chief revealed Tuesday that 10 of the 45 press officers in his department used to work for News International, but he denied there are any improper links between the force and Rupert Murdoch’s media empire.
Paul Stephenson was giving evidence to a committee of lawmakers investigating wrongdoing at the now-shuttered tabloid News of the World, and allegations of bribery and collusion between Murdoch employees and the police.
“I understand that there are 10 members of the (Department of Public Affairs) staff who have worked in News International in the past, in some cases journalists, in some cases undertaking work experience with the organization,” he said.
News International is the British newspaper division of Murdoch’s global News Corp.
Stephenson denied wrongdoing, or knowing the News of the World was engaged in phone hacking _ but acknowledged that in retrospect he was embarrassed the force had hired Neil Wallis, a former executive of the paper, as a PR consultant,
After being asked about his relationship with Wallis, who was arrested last week, Stephenson said he had “no reason to connect Wallis with phone hacking” when he was hired for the part-time job in 2009.
He said now that the scale of phone hacking at the paper has emerged, it’s “embarrassing” that Wallis worked for the police.
Stephenson announced his resignation Sunday, saying allegations about his contacts with Murdoch’s News International were a distraction from his job.
He was followed out the door by assistant commissioner John Yates, who gave evidence before a hotly anticipated appearance by Rupert Murdoch, his son James and the media mogul’s former U.K. newspaper chief, Rebekah Brooks.
Yates said that with the benefit of hindsight he would have re-opened an inquiry into electronic eavesdropping of voicemail messages.
Yates said if he “knew now” how the phone hacking scandal would enfold, he would have done something different.
He has denied wrongdoing in the scandal.
Rupert Murdoch’s car was mobbed by photographers as he arrived for a grilling from U.K. lawmakers about the phone hacking scandal that has swept from his media empire through the London police and even to the prime minister’s office.
The elder Murdoch’s Range Rover was surrounded as he arrived at the Houses of Parliament three hours early, and it quickly drove off. The vehicle returned to Parliament about half an hour before the hearing was due to start.
Politicians will be seeking more details about the scale of criminality at the News of the World, while the Murdochs will try to avoid incriminating themselves or doing more harm to their business without misleading Parliament, which is a crime.
Lawmakers are also holding a separate hearing to question London police about reports that officers took bribes from journalists to provide inside information for tabloid scoops and to ask why the force decided to shut down an earlier phone hacking probe after charging only two people.
Detectives reopened the case earlier this year and are looking at a potential 3,700 victims.
London’s Metropolitan Police force said Tuesday it had asked watchdog to investigate its head of public affairs over the scandal _ the fifth senior police official being investigated. The Independent Police Complaints Commission will look at Dick Fedorcio’s role in hiring a former News of the World executive as an adviser to the police.
Fedorcio also was questioned by lawmakers Tuesday, along with Stephenson and Yates.
It was the appearance by the Murdochs and Brooks that was drawing huge public interest.
Members of the public and journalists lined up hours ahead of time in hope of a spot in the small committee room, which holds about 40 people. More will be able to watch in an overspill room, and Britain’s TV news channels are anticipating high ratings for the appearance.
Prime Minister David Cameron cut short a visit to Africa and is expected to return to Britain for an emergency session Wednesday of Parliament on the scandal.
A former News of the World reporter, Sean Hoare, who helped blow the whistle on the scandal, was found dead Monday in his home quick pay day loan. Police said the death was “unexplained” but is not being treated as suspicious. A post-mortem was being conducted Tuesday. Hoare was in his late forties.
Brooks’ spokesman, David Wilson, said police had been handed a bag containing a laptop and papers that belong to her husband, former racehorse trainer Charlie Brooks. Wilson said the bag did not contain anything related to the phone hacking scandal and he expected police to return it soon.
The bag was found dumped in an underground parking lot near the couple’s home on Monday, but it was unclear how exactly it got there. Wilson said Tuesday that a friend of Charlie Brooks had meant to drop the bag off, but he would say only he left it in the “wrong place.”
Murdoch shut down the News of the World tabloid that Brooks once edited after it was accused of hacking into the voice mail of celebrities, politicians, other journalists and even murder victims. Still, the closure has done little to end a string of revelations about the murky ties between British politics and the country’s tabloid media.
The scandal has prompted the resignation and subsequent arrest of Brooks and the resignation of Wall Street Journal publisher Les Hinton, sunk Murdoch’s dream of taking full control of lucrative satellite broadcaster British Sky Broadcasting and raised questions about his ability to keep control of his global media empire.
Rupert Murdoch is eager to stop the crisis from spreading to the United States, where many of his most lucrative assets _ including the Fox TV network, 20th Century Fox film studio, The Wall Street Journal and the New York Post _ are based.
In New York, News Corp. appointed commercial lawyer Anthony Grabiner to run its Management and Standards Committee, which will deal with the scandal. But News Corp. board member Thomas Perkins told The Associated Press that the 80-year-old Murdoch has the full support of the company’s board of directors, and it was not considering elevating Chief Operating Officer Chase Carey to replace Murdoch as CEO of News Corp.
News Corp.’s widely traded Class A shares fell 68 cents to $14.97 Monday _ down 17 percent since the scandal reignited on July 4.
Britain’s Independent Police Complaints Commission also is looking into the phone hacking and police bribery claims, including one that Yates inappropriately helped get a job for the daughter of Wallis. Wallis has been arrested on suspicion of conspiring to intercept communications.
London police also confirmed that they once employed a second former News of the World employee besides Wallis. Alex Marunchak had been employed as a Ukrainian language interpreter with access to highly sensitive police information between 1980 and 2000, the Metropolitan Police said.
The police force said it recognized “that this may cause concern and that some professions may be incompatible with the role of an interpreter,” adding that the matter will be looked into.
Meanwhile, Internet hackers took aim at Murdoch late Monday, defacing the sites of his other U.K. tabloid, The Sun, and shutting down website of The Times of London. Visitors to The Sun website were redirected to a page featuring a story saying Murdoch’s dead body had been found in his garden.
Internet hacking collective Lulz Security took responsibility for that hacking attack via Twitter, calling it a successful part of “Murdoch Meltdown Monday.”
Lulz Security, which has previously claimed hacks on major entertainment companies, FBI partner organizations and the CIA, hinted that more was yet to come, saying “This is only the beginning.”
It later took credit for shutting down News International’s corporate website. Another hacking collective known as Anonymous claimed the cyberattack on The Times’ website.
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Danica Kirka and Bob Barr contributed to this report.
Meera Selva can be reached at http://twitter.com/Meera_Selva.
Jill Lawless can be reached at http://twitter.com/JillLawless
President Barack Obama prodded Congress Tuesday to make a deal within the next two weeks on raising the nation’s borrowing limit, and he said he was summoning leaders of both parties to the White House this week to try to get it done.
Obama said he opposed any effort to “kick the can down the road” with a short-term increase, as suggested by some lawmakers _ though he stopped short of ruling that out. He reiterated his position that any deal must include not only spending cuts but also new revenue _ tax increases already ruled out by Republicans.
“We need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people,” Obama said at the White House.
“We’ve made progress, and I believe that greater progress is within sight, but I don’t what to fool anybody _ we still have to work through real differences,” the president said.
He said congressional leaders were being invited to meet Thursday at the White House need a personal loan with bad credit.
Obama spoke as the Aug. 2 deadline for raising the nation’s borrowing limit came closer. Experts say lawmakers must waste no time in making a deal if they are to have any chance of getting it finalized and passed through both chambers of Congress in time.
Despite the president’s optimism, it remained unclear where compromise could be found. Republicans are insisting they will note vote to raise the debt limit without major spending cuts; Democrats are refusing to sign off on cuts of such magnitude without at least some tax increases as well. Republicans say they won’t sign off on any tax hikes at all, including those Obama wants targeting the wealthiest Americans or closing loopholes to corporations.
The administration says that if the government’s borrowing limit is not increased by Aug. 2, the U.S. will face its first default ever, potentially throwing financial markets into turmoil.
Clayco Inc. appointed Melissa Hughes as vice president of talent management.
She will provide overall strategic leadership on all elements of the talent management function, including management of policy and procedures while focusing on executive search and hire, training and development and succession planning.
Hughes has more than 20 years of experience in human resources. Most recently she was vice president of Human Resources for KV Pharmaceutical.
She has a bachelor’s degree in human resource management and a master’s degree in business administration, both from Lindenwood University. She also holds an advanced human resource executive certification from the University of Michigan.
After notching a rare victory by stopping highly radioactive water from flowing into the Pacific on Wednesday, workers at Japan’s flooded nuclear power complex turned to their next task: injecting nitrogen to prevent more hydrogen explosions.
Nuclear officials said there was no immediate threat of explosions like the three that rocked the Fukushima Dai-ichi plant not long after a massive tsunami hit on March 11, but their plans are a reminder of how much work remains to stabilize the complex.
Workers are racing to cool down the plant’s reactors, which have been overheating since power was knocked out by the 9.0-magnitude earthquake and tsunami that killed as many as 25,000 people and destroyed hundreds of miles of coastline.
Unable to restore normal cooling systems because water has damaged them and radioactivity has made conditions dangerous, workers have resorted to pumping water into the reactors and letting it gush wherever it can.
Superheated fuel rods can pull explosive hydrogen from cooling water, so now that more water is going into the reactors, the concern is that hydrogen levels are rising.
Technicians began pumping nitrogen into an area around one of the plant’s six reactors at 1:31 a.m. Thursday (1631 Wednesday GMT; 12:31 p.m. Wednesday EDT) to counteract the hydrogen, said Makoto Watanabe, a spokesman for Japan’s Nuclear and Industrial Safety Agency. They want to prevent hydrogen explosions that could spew radiation and damage the reactors.
The nitrogen pumping also has risks, but the nuclear agency approved it as a necessary measure to avoid danger, spokesman Hidehiko Nishiyama said. The injection could release radioactive vapor into the environment, but residents within 12 miles (20 kilometers) of the plant have been evacuated.
The government said Wednesday it might consider expanding that zone, though not because of the nitrogen injection. An expansion might not necessarily mean the radiation that has been spewing into the air and water from the plant is getting worse. The effects of radiation are determined by both the strength of the dose and the length of exposure, so the concern is that people farther away might start being affected as the crisis drags on.
“I would imagine residents in areas facing a possibility for long-term exposure are extremely worried,” Chief Cabinet Secretary Yukio Edano said. “We are currently consulting with experts so that we can come up with a clear safety standard.”
Edano did not say how far the zone might be expanded or how many people might be affected. Tens of thousands have been living in shelters since the tsunami, either because they lost their homes or are in the evacuation zone or both quick pay day loan.
Police in hard-hit Fukushima prefecture prepared to launch a full-scale search for bodies in the evacuation zone Thursday. Nearly 250 agents from the Tokyo Metropolitan Police will join local police searching for 4,200 people still missing there.
At the plant, 140 miles (220 kilometers) northeast of Tokyo, workers finally halted the leak of highly contaminated water that raised worry about the safety of seafood caught off the coast.
But even that rare good news came with a caveat. Highly contaminated water pooling around the plant has often made it difficult or impossible for workers to access some areas because of concerns about radiation exposure. Now that the leak has stopped, the pooling could actually get worse because water that had been going into the ocean could back up onto the grounds of the complex.
When water was still leaking into the ocean, officials said it would quickly dissipate in the vast Pacific, but the mere suggestion that seafood could be at risk stirred worries throughout Japan’s fishing industry. Water with lower levels of radioactivity is also being dumped into the sea to make room to store other water with higher levels of contamination on the plant grounds.
In the coastal town of Ofunato, Takeyoshi Chiba, who runs the town’s wholesale market, warily watched developments at the plant, about 120 miles (200 kilometers) down the coast.
“There is a chance that the water from Fukushima will come here,” he said, explaining that area fishermen still haven’t managed to get out to sea again after the tsunami destroyed nearly all of their boats. “If Tokyo decides to ban purchases from here, we’re out of business.”
This week, the government set its first-ever standard for the amount of radiation allowed in fish after levels in waters near the plant measured several million times the legal limit and elevated levels were found in some fish. The standard is the same as one already in place for vegetables.
Stopping the leak by injecting several chemicals into the area around it seemed to help cut down on radiation. By afternoon, radiation at a point 360 yards (330 meters) off the coast was 280 times the legal limit, down from a high of more than 4,000, although Edano said plant operator Tokyo Electric Power Co. was still watching closely.
“Right now, just because the leak has stopped, we are not relieved yet,” Edano said. “We are checking whether the leak has completely stopped, or whether there may be other leaks.”
Shares of chipmaking companies soared on Tuesday following Texas Instruments’ late Monday $6.5 billion bid for rival National Semiconductor.
Both companies make analog chips, which are used to help computers sense the world around them.
National Semiconductor (NSM) led the pack, gaining more than 70% in early trading, but other analog chipmakers also rose significantly: Intersil (ISIL) climbed 13%, ON Semiconductor (ONNN) rose 5%, and Fairchild Semiconductor (FCS) gained 3%
Shares of Analog Devices (ADI), Linear Technology (LLTC), Maxim Integrated Products (MXIM),International Rectifier (IRF) all rose about 1%.
The deal would give Texas Instruments (TXN, Fortune 500), already the world’s largest analog chipmaker, an even more sizable lead over its competition. The combined company would control 18% of the market, with the next largest rivals holding a 4% to 6% share.
As a result, analysts anticipate more deals in that segment of the chip market
"We do believe that more consolidation is possible in the analog space given the fragmented and diffuse nature of that market, and given that TI is so much larger than its next few competitors," said Craig Berger, analyst at FBR Capital Markets.
TI could buy up more analog chipmakers, or smaller competitors could merge for scale and efficiencies, analysts say. Shares of TI fell more than 2%.
Berger sees Fairchild Semiconductor and International Rectifier as the most attractive takeover targets. Both have high exposure to the industrial and automotive sectors, and their share prices are relatively cheap compared to their earnings expectations.
Even Intel (INTC, Fortune 500), AMD (AMD, Fortune 500), and Nvidia (NVDA), which have all suffered through recent slumps and aren’t players in the analog business, were up about 1% on Tuesday.
Chip stocks got knocked around in the past two days, after IHS iSuppli reported that semiconductor suppliers’ string of six consecutive quarters of sequential sales growth ended in the fourth quarter of 2010.
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