Your update of the most important business news from dozens of respected news sources, selected by the editors of BusinessWeek.

Early Edition July 22 2008 at 04:58 AM Edited by Chi-Chu Tschang and Harry Maurer

Apple Forecasts Bumpy Quarter

Apple's shares tumbled 10% on July 21 after the company said its current quarter earnings would be well below Wall Street estimates. Despite dour predictions for the coming quarter, Apple posted third-quarter earnings that were above its own target and those of Wall Street, leaving some analysts to believe Apple had predicted extremely conservatively only to then beat their own numbers.

Declining consumer spending has knocked profits of many U.S. companies, and earlier reports from Google and Microsoft have unnerved investors. In contrast, Apple posted record computer sales -- widely seen as proof that many buyers of iPhones and iPods also buy the company's mainstay products.

Source: Reuters, BusinessWeek

Vodafone scales back sales predictions

Vodafone Group, the world's largest mobile-phone company, scaled back its sales forecast after slowing economic growth hurt revenue from phone calls. The company said sales may be 'around the bottom' of the range of $79.7 billion to $81.6 billion, up from $71.1 billion over the same period last year. During early trading in London, Vodafone's share price dropped as much as 13%, the most in at least 20 years.

Source: Bloomberg

Books of Fannie Mae, Freddie Mac examined

Examiners from the Federal Reserve and the Comptroller of the Currency are inspecting the books of U.S.' two largest mortgage finance companies Fannie Mae and Freddie Mac. In a meeting with New York Times editors and journalists, Treasury Secretary Henry Paulson said on July 21 the Fed and the comptroller's office began reviewing the companies' books after their declining stock prices caused widespread anxiety in the market.

Source: New York Times

Paulson: Housing Correction in 'Months'

Treasury Secretary Henry Paulson told BusinessWeek editors on July 21 that he thinks it will take months, not years, to work through "the largest part of the housing correction." Paulson said that while some of the excesses in housing will take "more than months" to be washed away, "the more reasonable question is: How long will it take to work through the largest part of the housing correction?" He also said that once home prices stabilize, the housing sector could begin contributing to economic growth "well before we're through all the issues in housing."

Source: BusinessWeek

Ericsson profits fall 70%

Ericsson, the world's largest maker of wireless networks, said second-quarter profits fell 70% because of costs to cut jobs and falling sales of phones made with Sony. Net income declined to $320 million from $1.07 billion, the Stockholm-based company said on July 22.

Source: Bloomberg

Ford offers to buyout hourly workers

Ford will extend buyout offers to hourly workers at more than a dozen plants in Michigan and Ohio as it tries to trim its workforce to match a declining U.S. market share. Ford, which reported a $2.7 billion loss in 2007 and has abandoned the goal of returning to profitability by 2009, previously had extended buyout offers at plants in Kentucky and Ohio due to the declining demand for large pickup trucks and SUVs.

Source: Reuters

GM joins forces with utilities over electric car

Three dozen electric utilities and General Motors have agreed to collaborate over a plug-in electric car that is expected to hit the streets in about two years time. The partnership is the first major effort by the two industries on an electric vehicle and includes some of the biggest names in the power sector spanning nearly 40 U.S. states.

Source: Wall Street Journal

U.S. Fed focuses on inflation

As the dust settles on the latest round of financial turmoil, the U.S. Federal Reserve now appears to be focused on inflation rather than economic growth. According to the minutes at the June 30 policy meeting, the Fed in effect switched gears. "With increased upside risks to inflation and inflation expectations, members believed that the next change in the stance of policy could well be an increase in the funds rate," the minutes said

Source: Financial Times

TiVo teams up with Amazon

TiVo, the Silicon Valley company that introduced millions to the idea of skipping television commercials, is trying to crack a decades-old media dream. On July 22, the company introduced a "product purchase" feature in partnership with the Internet retailer Amazon.com.

Source: New York Times

Merrill cuts back on private jets

Merrill Lynch has cut the use of private jets among its senior managers by requiring them to get clearance from the global head of investment banking to hire one and to demonstrate there is no more efficient means of transport. The policy is part of a drive by the Wall Street bank to reduce administration and non-payroll expenses.

Source: Financial Times

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