The recovering U.S. economy may be a mixed blessing for Wal-Mart. Wealthier customers who turned to the world’s largest retailer during the recession appear to be trading back up, and stubbornly high unemployment and gas prices are still squeezing its main customers, who are having more trouble stretching their dollars to the next payday. The squeeze hasn’t hurt its profits. Wal-Mart Stores Inc. posted a 10 percent increase in first-quarter net income Tuesday, but that was driven by cost-cutting and growth overseas. Wal-Mart also offered a muted outlook for the second quarter. Still, its shares rose more than 2 percent, or $1.29, to $53.99 after its results beat Wall Street expectations. U.S. stores are seeing fewer customers. To win them back, Wal-Mart announced another round of price cuts on groceries Tuesday and said it’s restocking some products it eliminated as part of its campaign to declutter stores.
Building bump is scaling back
Home construction rose last month to the highest level in 18 months as buyers capitalized on tax incentives. But now that those tax credits have expired, builders are scaling back. That means the home-building industry isn’t likely to contribute as much to the economic recovery. Analysts expect sales to fall this summer as the effect of the tax credits fades. Mortgage rates have remained near record-low levels. But high unemployment and tight lending standards, combined with the end of the tax credits, will keep a lid on home construction, analysts say.
H-P earnings rise 28 percent
Hewlett-Packard Co.’s net income jumped 28 percent in the latest quarter as stronger demand for computers is helping to heal a battered technology industry. The company also raised its 2010 forecast, sending shares higher. The results mark a continued growth in profit at the world’s No. 1 maker of personal computers and printers. Although HP had been making money even during the height of the recession, its net income had been getting smaller each quarter. But for three straight quarters now, net income has been growing. The numbers show how deeply dependent HP is on PCs, even as it expands aggressively into more profitable areas, such as technology services and computer networking. HP said after the market closed Tuesday that it earned $2.2 billion, or 91 cents per share, in its fiscal second quarter, which ended April 30. It earned $1.7 billion, or 71 cents per share, a year ago.
Boeing to renew Renton airport deal
Officials from the Boeing Co. and the city of Renton plan to sign a 40-year lease for the aerospace company to use Renton Municipal Airport, next to Boeing’s 737 assembly plant. Industry analysts have speculated Boeing might be considering a new assembly plant for any plane to succeed the workhorse 737.
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