Business Briefs - Thursday

RETAIL

Crocs stepping out with new line

The maker of casual plastic slip-on footwear introduced three new shoe models that have a closed heel and toe and are designed to meet workplace regulations. One of the new line up, Bistro, was tailored for restaurant and food service industry workers. Its retail price will be $39.99, and it will be available in late summer. Crocs CROX this month reported Q1 earnings more than tripled to 61 cents a share, beating views by 12 cents. Revenue also tripled to $142 mil. Shares surged 4.6% to 76.30 on heavy volume.

Yum Brands declares stock split

The fast-food chain operator of KFC and Taco Bell said its board approved a 2-for-1 stock split. Yum Brands YUM expects to return $1.3 bil to its shareholders during 2007 by reducing its share count by at least 3% through share repurchases and paying a dividend. Earlier in May, Yum slightly raised its '07 EPS outlook, citing strong overseas sales. Shares edged up 0.2% to 66.35.

Cracker Barrel, a unit of CBRL Group, said it will eliminate artificial trans fats by the middle of '08. The restaurant chain said it has been working on new recipes since late '06. Several leading fast-food chains have opted to move away from trans fats, which health studies have indicated could clog arteries and cause heart problems. Cracker Barrel dipped 0.6% to 46.33. Genesco closes 57 weak stores

The shoe and cap retailer said it plans to close or convert up to 57 underperforming stores, and slashed its Q1 EPS outlook to 23-28 cents, ex items, vs. views of 28 cents. Genesco GCO said most of the closures will be at its ailing Underground Station chain, which caters to young, urban adults. The company recently rejected a $1.2 bil takeover bid from Foot Locker FL. Shares edged up 0.6% to 49.

MACHINERY

Caterpillar falls on downgrade

The maker of heavy machinery slipped 1.5% to 74.84 after it was downgraded to hold from buy by Stifel Nicolaus. The researcher said Caterpillar CATwill likely see a slowdown in business. Caterpillar acknowledged in Q1 that sales of its bulldozers and construction equipment were weakening in the U.S., but emphasized foreign sales were increasing more than expected.

TRANSPORTATION

AirTran says majority backs offer

The airline company said nearly 57% of Midwest Air Group's shareholders back its hostile takeover offer. Midwest's MEH directors had previously called the offer of $15.89 a share, or $389 mil, inadequate. AirTran, AAI the No. 10 airline by revenue, has twice already raised its offer. AirTran climbed 2.8% to 12.12. Midwest rose 2.7% to 15.50.

Ryanair offers cautious outlook

The CEO of the European discount airline said he expects to issue a "very conservative" outlook next month when the carrier reports earnings, due to falling ticket prices. "There's no doubt in our minds that yields are going to be softer," said Michael O'Leary RYAAY. Speaking at the launch of new routes to Italy, he said Ryanair faces a "challenging" year but added that he expects to report good news in cutting operating costs. Shares fell 1.4% to 41.79.

GM CEO expecting more mergers

The automaker's chief executive, Rick Wagoner, said he sees further consolidation in the U.S. auto industry. In his first public comments since DaimlerChrysler's sale of its Chrysler unit to Cerberus Capital Management, Wagoner said he doesn't see a rush to privatize the industry. He indicated that GM's GMformer financial arm, GMAC, could have a merger in its future. GMAC is currently 51% owned by Cerberus. Shares dipped 0.5% to 31.59.

About 1 in 3 auto parts suppliers are in financial distress, according to a study by BBK, which advises automakers, suppliers and private-equity firms. A number of auto parts firms have filed for bankruptcy in the past few years, including Delphi, Dana and Tower Automotive. The study said 22% of major suppliers could fall into financial distress. IPOs

China Sunergy jumps in debut

The solar cell products company soared 50% to 16.56 in its trading debut. China Sunergy CSUNoffered 8.5 mil shares at $11 a share, pricing above its expected $8-$10 range, and raising $94 mil. The China-based firm reported income of $11.8 mil on $150 mil in revenue in '06.

TechTarget TTGT, which provides online content aimed at bringing together buyers and sellers of corporate IT products, surged 13.8% to 14.79 on its first day of trading. The offering raised $100 mil. TECHNOLOGY

IBM to rely more on software sales

The No. 1 technology services company said it expects sales of its enterprise software will account for nearly half of its total profit by 2010, up from 40% last year. IBM told an analysts gathering that revenue from emerging foreign markets should double by 2010 and it expects to increase the profitability of its services business 2% within 3 years. Shares slipped 0.5% to 105.31.

WPP to buy 24/7 Real Media

Internet ad firm 24/7 Real Media TFSM is being bought by the world's second largest marketing services company for $649 mil. WPP Group expects online ads to exceed $33 bil this year. The deal marks the latest in a spate of buyouts in the online ad market. Google GOOG bought DoubleClick for $3.1 bil, Yahoo YHOO is buying the rest of Right Media for $680 mil. Yahoo bought 20% of the firm in April. Also, Publicis acquired Digitas for $1.3 bil. 24/7 Real Media climbed 3.5% to 11.65.

Acxiom to go private for $2.25 bil

The data manager agreed to be acquired by two private investment firms for $2.25 bil. ValueAct Capital and Silver Lake Partners will pay $27.10 a share. ValueAct is already the No. 2 shareholder of Acxiom with a 14% stake and has one of its managing partners on the company's board. The two partners will have an equal stake in the company and assume $750 mil in debt. Shares jumped 18% to 27.95.

CONSUMER

Sony hurt by PlayStation 3 slump

The maker of PlayStations will lose about $413 mil in its video games business this fiscal year, and a recovery won't come until the arrival of more games to play on PlayStation 3, the company said. Competition with Nintendo's Wii has also hurt PS3. Sony SNE widened its Q4 loss to $563 mil, due to costs for the PS3, which went on sale in Nov. in the U.S. and Japan. Sony expects booming sales of flat-panel TVs and digital cameras to increase earnings in coming months. Shares slipped 1.4% to 55.05.

MOTOROLA

Motorola buys Modulus Video

The world's No. 2 mobile phone company Motorola MOT said it is buying privately held Modulus Video for an undisclosed sum. Modulus develops advanced video coding compression systems, used to deliver video over Internet protocol TV as well as cable, broadcast and satellite TV. Shares rose 2% to 18.60.

Motorola MOT will sell its new phone, the Razr 2, which has a slimmer screen than the Razr phone. The new phone will launch next month in South Korea ahead of a global launch in July. MEDIA

Clear Channel sale supported

Private equity groups seeking to buy Clear Channel, an operator of radio stations, are working to revise their $19.6 bil offer in order to secure shareholder support before the deal is voted on next Tuesday, sources said. Two-thirds of Clear Channel's shareholders are required to support the buyout. Shares dipped 0.3% to 37.79.

FINANCE

Russia suing Bank of New York

The banking company is facing charges from Russia's customs services claiming that between '96-'99 the bank illegally brought goods into Russia without paying taxes. Bank of New York was charged in Moscow's Arbitration Court over the alleged illegal schemes. The case stems from a U.S. charge that resulted in Bank of New York's BKexecutive and her husband pleading guilty. The couple acknowledged helping Russian bankers avoid taxes and covering up money connected to crimes. Bank of New York slid 1.1% to 40.75.

The New York Board of Trade, a subsidiary of IntercontinentalExchange ICE, said its electronic futures contracts have received regulatory approval needed to be traded in the U.K., effective immediately. ICE rose 1.4% to 139.80.