The government signaled Friday that some distressed banks will need to raise more cash to meet stricter standards it has set for the 19 financial firms that took its “stress tests” and suggested it’s ready to step in with more federal help. Federal Reserve officials held top-secret meetings with bank executives to give them preliminary findings of how each bank would fare if the recession got much worse. It reinforced the Fed’s view that major financial firms are “too big to fail,” and that the government must do whatever is necessary to save them.
Microsoft shares rise 10 percent
Shares of Microsoft Corp. jumped more than 10 percent Friday, the first trading session since the software maker said sinking personal computer shipments pushed sales and earnings down significantly from a year ago. Redmond-based Microsoft makes most of its profit from selling the Windows operating system and business software such as Office. With PC shipments down about 7 percent in the first three months of the year, there was little the world’s largest software maker could do to improve returns in the quarter. For the three months that ended March 31, Microsoft’s profit fell 32 percent to $2.98 billion, or 33 cents per share.
Unlimited deals help Netflix growth
The bottom may be falling out of the DVD market for Hollywood, but not at Netflix Inc. The DVD rental firm set a record for subscriber growth — blowing past the 10-million-customer mark — and reported that first-quarter profit skyrocketed almost 70 percent from the same period a year earlier. Reed Hastings, chief executive of Netflix, attributed the growth to the online video service’s “unlimited rental” deal, which allows movie junkies all-you-can-watch plans for the month.
Recession crimps Xerox earnings
Xerox Corp. met lowered expectations for first-quarter earnings Friday, but said slower spending on printing equipment and supplies continued to hurt sales, a trend the company projected to continue for at least the next few months. The company earned $42 million, or 5 cents per share, in the quarter, topping Wall Street forecasts by a penny, according to Thomson Reuters. That compares with a loss of $244 million, or 27 cents per share, a year ago. Shares rose 21 cents, or 3.7 percent, to close at $5.95.
New MySpace CEO worked at Facebook
With MySpace falling behind Facebook as the world’s largest online social network, MySpace tapped a former Facebook executive Friday as its new chief executive. Owen Van Natta, 39, replaces Chris DeWolfe, a co-founder of MySpace, who stepped down as chief executive Wednesday. News Corp., which owns MySpace, said Van Natta’s new role begins immediately.
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