J.C. Penney: A surprise slump in sales
Efforts by new J.C. Penney CEO Ron Johnson to shake up the ailing chain haven’t clicked with consumers. The retailer announced a $163 million loss in the first quarter and a 20 percent drop in sales. Johnson, former retail chief at Apple, has simplified product pricing into three tiers—everyday prices, monthly specials, and clearance—in an attempt to wean customers off discounts. Yet he acknowledged the company must do more to educate shoppers about the new strategy. In the earnings release, J.C. Penney also said it was discontinuing its 20¢-a-share quarterly dividend, a move that will free up $175 million a year in cash that could be devoted to the turnaround.
Wireless carriers: Creating family plans for data
Verizon Wireless and AT&T are preparing to roll out shared-data plans this year. The idea: Let users buy a chunk of data per month that can be used for phones, iPads, and other wireless devices, an option that should appeal to families and small businesses on tight budgets. The carriers hope the new plans will reduce customer turnover. Yet neither is eager to be first to take the risk that the shared plans could cut what subscribers pay, while increasing network traffic. Consumers spent $62.7 billion on data plans last year.
Nissan Motors: Revving up the Camry competition
Nissan plans to run three shifts at its U.S. plants to build a redesigned Altima. The Altima outsold the Honda Accord last year, and now Nissan is aiming at Toyota’s Camry, the top-selling passenger car in the U.S. Production of the 2013 Altima has begun at Nissan’s Smyrna (Tenn.) plant, and the revamped model is scheduled to go on sale in late June, with a base price of $21,500. Nissan could dial up production to as many as 400,000 cars by next year with the extra shift at the Smyrna plant and at its factory in Canton, Miss.
General Electric: A milestone in the recovery
For the first time since 2009, General Electric’s finance unit will resume sharing some of its profits with its parent company. GE Capital will pay a $475 million quarterly dividend in addition to a one-time $4.5 billion payout this year. Reinstating the dividend is a milestone in GE Capital’s recovery from the financial crisis, when the unit suffered credit losses of $32 billion and required capital infusions from its parent. CEO Jeffrey Immelt is shrinking GE Capital by exiting businesses such as Irish mortgage lending.
Apple: Preparing a sleeker MacBook Pro
Apple is preparing a new lineup of thinner MacBook laptops running on powerful Intel chips, according to sources who requested anonymity because the plans haven’t been made public. The MacBook Pro machines, which will be unveiled at Apple’s annual developers conference starting June 11, will also have high-definition screens like those on the iPhone and iPad and flash memory that cuts startup time and extends battery life. Apple’s Mac sales have more than doubled since 2007, reaching $21.8 billion last year.