In Business This Week: Headliner
Robert Eckert: Babe in Toyland
Can a 23-year veteran of the food industry put toymaker Mattel back together again? Robert Eckert, 45, the former CEO of Philip Morris' Kraft Foods Div., will succeed Jill Barad as chairman and CEO of the troubled El Segundo (Calif.)-based toymaker. Barad left Mattel in February amid large losses and plunging shares.
Although Kraft has always been healthy, Eckert has faced his share of challenges. Kraft countered the move away from home cooking with easier-to-prepare meals such as Stove Top "dinner kits" and Lunchables cheese and cracker combos. The result: industry-leading growth.
At Mattel, Eckert faces kids who have drifted away from such core brands as Barbie dolls and Matchbox cars in favor of online games and educational toys. Barad tried to shift in that direction by spending $3.6 billion for software maker Learning Co., but she overpaid just as the industry shifted from CD-ROM-based games to the Net. Expect Eckert to focus on new products and heavy promotion of Mattel's well-known brands.By Christopher Palmeri in Los AngelesReturn to top
Good for What Ails Hewlett-Packard
Hewlett-Packard shows signs of returning to its old, predictable ways: fast sales growth and even faster profit growth. On May 16 it said quarterly profits rose 17%, to $935 million, aided by improved sales of high-end computers. But don't tell Wall Street: HP's stock fell 6% the next day. Why? Blame Agilent, the lab-equipment arm it spun off last year. Agilent's emergence as a provider of Net-related measuring tools has helped fuel the 75% rise in HP shares since Jan. 1, but problems in Agilent's health-care unit caused the unit's quarterly results to fall short of the highest estimates. Come June 5, the confusion will be over. That's when HP plans to sell its 84% stake in Agilent to HP shareholders.Edited by Anne NewmanReturn to top
IMF to East Asia: Oops!
Nearly three years after the onset of the Asian economic crisis, the International Monetary Fund has finally admitted that it was wrong in telling countries such as Thailand and Indonesia to cut spending when their troubles first hit. "The advice that the IMF has offered has not always been right in all of the details," IMF First Deputy Managing Director Stanley Fischer acknowledged on May 16. "Fiscal policy should not have been tightened at the start of the Asian crisis." But the IMF still insists it was right to advise Asian nations to raise rates at the time to protect their currencies from turmoil. Critics have charged that its double dose of monetary and fiscal austerity only deepened Asia's recession.Edited by Anne NewmanReturn to top
Simmering Woes at Campbell's
There's not much cooking at Campbell Soup. On May 17, CEO David Johnson said Campbell's earnings per share for the fiscal year ending July, 2000, would fall about 6% below Wall Street expectations. The reason: a long slide in U.S. soup consumption. Analysts figure Johnson will try to improve profits before seeking a merger or acquisition. "It's hard to get married when you have pimples all over your face," says Prudential Securities analyst John McMillin.Edited by Anne NewmanReturn to top