Sprint Nextel Continues to Lose Subscribers
Sprint Nextel, the nation's third-largest wireless carrier, said today that it lost $505 million in the first quarter, up from a $211 million loss in the year-ago quarter. Long-term subscribers are dropping Sprint, which merged with Nextel in 2005. Total subscriptions are down 1.5 percent to 52.8 million. Revenue is down 7.5 percent from a year earlier. David LaGesse has reported on Sprint's (apparently fruitless) attempts to offer something better than its competitors.
Cablevision Buys Newsday
Many people expected Rupert Murdoch, CEO of News Corp., to add the Long Island-based newspaper Newsday to his media empire, which includes Fox and Dow Jones. But his $580 million bid fell through this weekend, and it has been announced today that Cablevision, a New York cable TV provider, will buy Newsday from Tribune Co. for $650 million. The company also owns Madison Square Garden, the New York Knicks, and the New York Rangers. Tribune is glad to get the cash from the deal, as that company, which owns the Chicago Tribune and the Los Angeles Times, is trying to deal with $8.2 billion in debt.
IndyMac Bancorp Predicts Unprofitable 2008
One of the nation's biggest mortgage lenders says it will not have a profitable quarter this year. IndyMac Bancorp, based in Los Angeles, reported a $184.2 million loss in the first quarter of the year. One year ago, the company turned a profit of $52.4 million. Mortgage-based securities and their decline in value took a big chunk out of the company's profits last quarter. It also lost money when it had to discontinue all loans from its construction lending division last year as home building dried up. To help turn things around, IndyMac says it will save $7.4 million a quarter by no longer paying dividends on preferred shares. Luke Mullins explained what's going on with mortgage rates earlier this spring.
Inflation on the Rise in China
One effect of rising food prices has been an upward swing in inflation in China. The Chinese National Bureau of Statistics announced today that its consumer price index was 8.5 percent higher in April of this year than last. Food costs were up 22.1 percent compared with last year and were the main driver of inflation, as nonfood prices were up 1.8 percent. The CPI for China is up 8.2 percent for the year so far, well above the Chinese government's 4.8 percent target. In February, inflation hit the highest level in 12 years, 8.7 percent, just slightly above where it stands for April. The government has raised interest rates several times in the past 18 months, but more action might be on its way. U.S. News reporters analyzed a variety of proposals to deal with the food crisis last week.