Motorola Profit Slumps 48% as Competition Hurts Phone Prices (Bloomberg)
Add another name to the list of tech heavyweights turning in godawful earnings figures for the quarter. Handset maker Motorola saw its profits drop precipitously, as a price war helped to devour its earnings. Also, the company was a one hit wonder. There was hopes that it could follow up its highly successful RAZR with other "design-ey" phones, like the KRZR, SLVR, ROKR, GRZR (a cow-inspired handset), and the RIZR (trademark negotiations between the company and rapper The RZA were intense, but ultimately ended better than Cisco and Apple's iPhone discussion), but none have really taken off. And if you've noticed, the RAZR ain't exactly the high-end thing it was just a couple years ago. In fact, they're fairly ugly, and glaringly cheap.
AT&T Plans ‘Unity’ Strategy for Free Calls (NYT)
AT&T is quickly trying to convince the public that a re-unified AT&T has a lot of value to offer consumers. For example, now any AT&T wireless customer will get a free call when they dial an AT&T landline. Sorry, but this has to be the lamest promotion ever. When was the last time you knowingly dialed an AT&T landline? Or, when was the last time you dialed into a landline period? Far from making one excited about the return of Ma Bell, it's sort of just a reminder how unexciting the whole thing is.
House Votes to Rescind Oil Drillers’ Tax Breaks (NYT)
Nothing screams "Democratic Party" louder than rescinding a tax break on big oil. And so it is, that early in the Democrats reign of terror (we jest), the house has done just that, rolling back some earlier bills that cut taxes for domestic oil companies. Oh, and guess what. With the extra money that the government will get in, a fund will be established for research into alternative energy. How thoroughly.... predictable.
High Prices Prod Developed World To Curb Oil Use (WSJ)
Yes Virginia, demand for oil is elastic. For the first time in years and years, the amount of oil consumed in a year was lower, in the developed world, than the amount consumed in the previous year. A declining demand picture just be playing a role in the slump in oil prices, for the most part is really difficult to explain. This is also the kind of thing that the mature OPEC countries (think Saudi) hate to see. They love high prices, as long as it doesn't have any kind of effect on consumption patterns. But the cash isn't worth it, if it gets Americans and Germans to start talking about conservation, nuclear power, electric cars and carpooling.
GE profit rises, "reviewing" plastics business (AP)
Ultimately, maybe plastics isn't the best business to be in. GE reported strong earnings this morning, on the back of strong overall growth. But the company's plastics operation was not up to snuff -- so much so that it dragged down the overall numbers. And you know GE's style; it doesn't tolerate underperformance very long. Bad employees are fired quickly (all neutron Jack style), and CEO Jeff Immelt says the company might dispose of the plastics business at some point. Ouch.
Inflation has best showing in 3 years (AP)
Remember all of those charts from last summer, when it turns out that people were Googling the word "stagflation" in record numbers. Economists took that to be a sure sign of, well, impending stagflation, presuming that the Google search must be some sort of leading indicator. Well, he haven't had too much of the stag stuff (yet), and even the inflation stuff, not so much. Oil has come down, and the latest reports show that it's behaving tame, tame tame. How many people are searching for "goldilocks economy" these days?
Opium production (Educated Guesswork)
Look, some countries just happen to be blessed with commodities that we happen to want illegal. There's nothing they can do about it. Take coca plants in Bolivia. We want those acres to be on fire, whereas their president and all of the farmers don't. In Afghanistan it's opium. If they could mine gold and oil, or grow sugar cane they probably would. It would certainly cause a lot less problem than opium, but that's not what they have. And business seems to be booming. After a production slump in 2001, the crop quickly recovered to normal levels and has resumed its growth since then. If only opium leaves were somehow on the PPI index, the boom in production would be a nice way to ease inflationary pressure.
After Inquiries, Ford Official Decides to Skip Company Jet (Dealbook)
There's something a little Castro-esque about telling your employees they're going to need to make sacrifices, and then traveling to family events on a private jet on the company's dime. So Ford executive Mark Fields has vowed to go cold turkey on the Gulfstream, and will instead fly commercial (first class, and on the company's dime, we presume). Granted, the cost of the jet was more symbolic than anything else, but it did add up, and amid all of the company's losses, it just looked bad. Still, in order to get more hard work out of Mark Fields, the company should really promise him use of the jet again, once the company is back in black.