Nike Inc.’s profit fell 10 percent in its fiscal first quarter as a special gain in the prior year did not recur, the company said Wednesday. Sales rose, however, with help from international operations. The Beaverton, Ore.-based athletic shoe and apparel company said its net income decreased to $510.5 million, or $1.03 per share, from $569.7 million, or $1.12 per share, a year earlier. But the 2007 quarter included a special item that increased earnings per share by 20 cents. If adjusted for the benefit, net income would have grown 10 percent. Analysts surveyed by Thomson Reuters, on average, had expected the company to earn 92 cents per share on sales of $5.19 billion.
FBI investigation hurts AIG stock
American International Group Inc. may have agreed to take the U.S. government up on a two-year, $85 billion loan to help stave off bankruptcy, but now the nation’s largest insurer faces an FBI investigation. The news sent AIG shares down nearly 34 percent Wednesday. Law enforcement officials said Tuesday that the FBI was investigating the New York-based insurer for potential fraud, as well as mortgage finance companies Fannie Mae and Freddie Mac, and investment bank Lehman Brothers Holdings Inc. The inquiries will focus on the financial institutions and the individuals who ran them.
Lowe’s to reduce size of most stores
Home improvement chain Lowe’s Cos. Inc. told investors Wednesday it is scaling down the size of most new stores and eyeing even smaller locations in some rural areas as it tries to operate more-efficient sites. Executives told investors at the company’s annual meeting that new stores in medium and large markets will be about 103,000 square feet — roughly 19,000 square feet smaller than many of its locations today. The new format will help the nation’s No. 2 home improvement chain cut capital outlay costs by almost $2 million per store.
Buffet, others to aid investment bank
Goldman Sachs Group Inc., seeking to improve not only its balance sheet but its standing with investors, has undertaken a huge capital-raising program that includes an investment of at least $5 billion from Warren Buffett and a common stock offering for another $5 billion. Goldman said Wednesday it was raising $5 billion through a common stock offering, doubling the amount it announced just the night before. Goldman priced 40.65 million common shares at $123 apiece. An additional 6.1 million shares may be sold to cover over-allotments, potentially boosting proceeds by $750.3 million.
GM puts Hummer brand up for sale
General Motors Corp. is planning to put its Strasbourg, France, manufacturing operation up for sale along with its Hummer truck brand. Company treasurer Walter Borst says in a slide presentation for the Deutsche Bank Leveraged Finance Conference that marketing materials for both operations will be distributed in October. The slides posted on GM’s Web site Wednesday say the assets under review are worth $2 billion to $4 billion.
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