Still unable to boost its sagging sales and profits, Sears, Roebuck & Co. on Thursday warned that its third-quarter earnings would fall well below expectations and announced a shake-up in its executive ranks.
Sears said third-quarter earnings would be in the range of 63 cents to 67 cents per share, less than the 82 cents analysts expected. The retailer also said it is revising its full-year earnings outlook.
The company also announced the departure of the chief of merchandising for its full-line department stores, Robert Mettler.
With Mettler's departure, two presidents have been appointed to cover his responsibilities. Lyle Heidemann will be president of hardlines, which includes appliances, hardware and consumer electronics. Mark Cohen will be president of softlines, which includes all clothing and accessories.
Goodyear gets control of Dunlop
AKRON, Ohio (AP) -- Goodyear Tire & Rubber Co. said it has completed its alliance with Japan's Sumitomo Rubber Industries Ltd., giving Goodyear control of Dunlop tire operations in North America and Europe.
The alliance will create the world's biggest tire business, with about 22 percent of the global tire market, pushing it past Bridgestone Corp. of Japan and Michelin of France.
Goodyear will pay $936 million to Sumitomo, acquire 10 percent of the manufacturer and help form six joint ventures around the world. Sumitomo will get a 1.4 percent stake in Goodyear in a stock swap valued at $88 million earlier this year.
"We anticipate building on Dunlop's past achievements and increasing sales on both continents, as well as in Japan, where we have gained an important foothold," said Samir Gibara, Goodyear chairman, president and CEO.
Mortgage rates edge higher
WASHINGTON (AP) -- The average interest rate on 30-year fixed-rate mortgages edged up to 7.83 percent this week.
The average was up from 7.80 percent last week, according to a weekly survey released Thursday by Freddie Mac, the mortgage company.
Fifteen-year mortgages, a popular option for refinancing, averaged 7.45 percent this week, also up from the average of 7.43 percent last week.
On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 6.18 percent this week, down from 6.22 percent the previous week.
The rates do not include add-on fees known as points, which averaged at or just over 1 percent of the loan amount for all three types of mortgages.
Big Board delays plan to go public
NEW YORK (AP) -- The New York Stock Exchange is delaying plans to sell stock in itself until at least next year while it studies issues ranging from regulation to the taxation of the deal.
Richard Grasso, the chairman of the NYSE, said earlier this summer that he had hoped the exchange could complete an initial public offering, or IPO, this fall so he could read the stock price of the Big Board in the newspaper on Thanksgiving morning.
But after a meeting of the board of directors of the exchange Thursday, Grasso announced the NYSE first had to come up with a strategic business plan that would satisfy a number of "very significant public policy questions." He said that study wouldn't be completed until sometime next year and that a decision then would be made on whether to proceed with an IPO.
In other business news
The Department of Justice has approved a plan by Fleet Financial Group Inc. and BankBoston Corp. to sell off more than 300 bank branches to resolve antitrust concerns about their upcoming merger. Fleet has been working to complete a takeover of BankBoston, and the approval of the Justice Department gets the plan over an important regulatory hurdle. The two banks have agreed to sell $13.2 billion in deposits in 306 branch offices in Massachusetts, New Hampshire, Rhode Island and Connecticut.
Faced with a slumping stock price, Global Crossing Ltd. moved Thursday to protect its plans to take over Frontier Corp., restructuring a $8 billion deal for the telephone company. Global Crossing's stock has dropped 50 percent in recent months, forcing the fiber-optic cable operator to increase its stock bid for Frontier. Shareholders of Rochester, N.Y.-based Frontier will now get 2.05 shares of Global Crossing, worth about $46 based on Thursday's closing stock price. Global Crossing also will assume about $1.6 billion in debt from Frontier.