The Week in Business: Profits, Losses, and Everything in Between
Apple nearly nudges Exxon out of the top spot for most valuable company, JC Penney unveils a new logo, and H-E-B tries to buy its .xxx domain name.
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The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across Texas this week.
By the end of the day, Exxon (barely) kept Apple at bay. On Wednesday Apple briefly reclaimed the top spot on the list of the most valuable companies in the US, passing Irving-based Exxon Mobil for the second time in six months.
By the end of trading, however, the oil giant had nudged its way back, closing with a market cap of $418.1 billion, topping Apple’s $416.4 billion, Forbes reported. The iPhone maker’s boost came on the heels of a report showing the company’s net income has doubled in the last year.
The Bottom Line: Before Apple made its first push to the front of the pack in August, Exxon had held onto the top spot since 2005. And the rivalry isn’t expected to wind down anytime soon, analysts told USA Today: Apple could see boosts like this with each new generation of the iPhone and iPad, which account for about three-quarters of the company’s revenue.
US Airways/American Merger: On Standby?
US Airways has made the first move in what is expected to be a crowded field of suitors considering a merger with AMR, the bankrupt parent company of American Airlines.
The CEO of US Airways, the smallest full-service carrier in America, announced Wednesday that the company has hired advisors to evaluate AMR’s operations, Bloomberg reported. Delta is also rumored to be considering a bid, but the company has not commented on its plans.
The Bottom Line: Analysts quoted by Bloomberg estimate that a merger of US Airways and American would have about a twenty-percent domestic market share, putting it “on roughly equal footing with United Continental, Delta and Southwest.”
A Penney’s Saved
As part of a sweeping makeover outlined by its new CEO this week, JC Penney is rolling out a new logo and a simplified sales strategy.
The Plano-based retailer’s new pricing scheme “ends rampant discounting and focuses on every day lower prices,” according to the AP. CEO Ron Johnson joined JC Penney last year after serving as an executive in Apple’s retail division, where he helped formulate the concept for the Apple Store.
The Bottom Line: The market seems to be reacting favorably to the initial flairs of Johnson’s retail magic: the company’s shares jumped nineteen percent Thursday following the release of projections showing strong profit growth in 2012.
All My XXX’s Live in Texas
San Antonio companies Valero and H-E-B are hoping to keep a clean image on the web.
Starting late last year, prospective website owners could buy .xxx domain names as a way to more clearly identify adult-oriented sites. Companies were offered a chance to block .xxx domains bearing their names before they were sold to the public, but Valero and H-E-B missed the window, and cybersquatters swooped in and registered Valero.xxx and HEB.xxx before they could claim them, reported the San Antonio Express-News.
The Netherlands man who bought the Valero domain is cooperating with the company and plans to transfer it back, but H-E-B is facing more resistance—the proud new owner of HEB.xxx tells the newspaper the domain “never has been and never will be for sale.”
The Bottom Line: Back in December, the Express-News’s first report on the .xxx phenomenon included several examples of domains that had not yet been reserved, including one using the name of billionaire businessman Red McCombs. Naturally, a watchful reader scooped up the domain the day after the article went to press.
Loser of the Week: The Houston Astros Front Office
Astros owner Jim Crane’s financial troubles are backing up on him.
Crane was ordered back into court this week by a bankruptcy judge to face questions related to his 2008 investment in county sewer bonds in Alabama. The deal went south when the bond market dried up in the financial crisis, and Crane lost about $24.5 million, prompting him to sue JPMorgan Chase for its role in the $3.2 billion debt default. The county is pursuing a similar lawsuit and is attempting to get Crane to testify about his settlement with JPMorgan. Crane is resisting the order, Bloomberg reported.
Winners of the Week: Austin Techies
Put another jewel in Austin’s tech tiara.
The average salary of the city’s tech professionals increased nearly thirteen percent over the last year—the largest increase of any U.S. city—based on a new survey from an industry website in New York. The average salary of software and engineering employees was $89,419 in 2011, according to the Austin American-Statesman. And another new claim to techie fame? Travel + Leisure ranked Austin third in its list of “America’s Techiest Cities” in its January issue.