In Business This Week: Headliner
Douglas Conant: In the Soup
After starring on the tennis team at Northwestern University, Douglas Conant thought of turning pro. But after sizing up the competition, he decided on graduate school. Now, his old skills may come in handy: As the new chief of Campbell Soup, he'll have to serve up a very smart turnaround strategy.
Campbell, which Conant joined on Jan. 8, is troubled. CEO Dale Morrison resigned last March. Although Campbell has 70% of the wet soup market, sales last year slipped 2%, to $6.3 billion. No wonder investors sent the stock price down 37% over the past two years, to $33 1/8 on Jan. 10.
Conant, 49, is used to reviving languishing brands. As president of Nabisco's snack and condiments division since 1995, he increased annual sales by 5% and earnings by 15%. His job at Campbell: "Develop a strategy to maximize shareholder wealth, get a team in place to execute that strategy quickly, and regain investor confidence." He may not have much time to get his backhand in shape.By Julie Forster; Edited by Monica RomanReturn to top
FedEx Finds an Overnight Partner
If you can't beat 'em, join 'em: Federal Express, which has been at loggerheads with the U.S. Postal Service ever since it expanded into overnight shipping, said on Jan. 10 it was teaming up with the Post Office on overnight deliveries. Beginning next August, FedEx will help transport the Postal Service's expedited deliveries on its jets. The $6.3 billion deal should help the Postal Service shrink its own air fleet and gives FedEx the right to place more than 10,000 of its drop boxes in post offices across the country. But it does little to address the Memphis-based carrier's bigger problem: United Parcel Service, which has been winning market share from FedEx in e-commerce shipments.Edited by Monica RomanReturn to top
Investors Can't Help Loving Amazon
Almost nobody figured Amazon.com Inc. would exit the holidays unscathed. Indeed, on Jan. 8 it reported preliminary fourth-quarter sales of $960 million, a hair shy of analysts' expectations. But the next day, investors pushed the stock up 10%, to $16.38 a share. The reason: Even in the slowest holiday retail season in a decade, Amazon eked out some good news. As operating losses fell to 7% of sales, Amazon's cash and marketable securities shot up to $1.1 billion, easing concerns that it would run out of money. The biggest worry now: slowing sales growth of 42%, down from the 50% some analysts had forecasted. If that trend continues, the path to profits may stretch even further out.Edited by Monica RomanReturn to top
Priceline and Expedia Bury the Ax
Now comes a conclusion to the big patent dustup between Priceline.com and Microsoft's Expedia. It started in October, 1999, shortly after Expedia's Web site began offering a name-your-own-price method of buying hotel rooms that was similar to Priceline's service. On Jan. 9, the companies said they were settling Priceline's patent infringement lawsuit. Expedia agreed to pay unspecified royalties to Priceline. But the settlement may be a case of too little, too late. Priceline once commanded a $24 billion market valuation based, in part, on its supposed legal monopoly. Now its market cap is in tatters as competitors have continued to chip away at its business.Edited by Monica RomanReturn to top