Amazon.com Inc. said Thursday that its fourth-quarter profit rose 9 percent and easily surpassed analysts' forecasts. Those results, plus an optimistic forecast, sent its shares soaring 13 percent in extended trading.

In December, Amazon called the holiday season its "best ever," and the earnings report backed up the idea that the online retailer is not being seriously hurt by cutbacks in consumer spending. Amazon said its revenue in the current quarter should be between $4.53 billion and $4.93 billion, while analysts are expecting $4.57 billion.

Shares of the Seattle-based company shot up $6.60 or 13.2 percent, to $56.60 in after-hours trading following the release of the earnings report. The stock had fallen 36 cents to finish regular trading at $50.

Amazon said its profit in the fourth quarter was $225 million, or 52 cents per share, compared with $207 million, or 48 cents per share, in the same quarter last year. Analysts, on average, had been expecting 39 cents per share, according to Thomson Reuters.

Revenue rose 18 percent to $6.7 billion, exceeding analyst estimates for $6.4 billion. If not for the strengthening dollar, which diminishes the value of sales in other currencies, Amazon said its revenue would have risen 24 percent.

Sales of items like books, CDs and DVDs climbed 9 percent to $3.64 billion, and sales of electronics and other merchandise rose 31 percent to $2.89 billion.

The recession's effects may have shown up in one key figure — Amazon's gross profit margin. It declined to 20.1 percent, from 20.6 percent in the fourth quarter of 2007.

In a conference call with reporters, Chief Financial Officer Tom Szkutak said the fall could be attributed in part to price cuts.

Retailers were especially hungry for consumer dollars during the holiday quarter: According to data from comScore Inc., Web retail sales alone fell 3 percent to $25.54 billion from Nov. 1 to Dec. 23, and probably fell 4 percent to $36.38 billion in the fourth quarter.

RBC Capital Markets analyst Stephen Ju said the drop in Amazon's gross margin was expected, given the discounting going on at its competitors. "They need to keep up — that's how they operate," he said.

Jeffrey Lindsay, an analyst with Sanford C. Bernstein, said he was "pleasantly surprised" by Amazon's results and that they indicate that the shift among consumers toward buying more items online is definitely holding up.

"People may be spending less in general, but they're spending a lot more of it online. Amazon has benefited from that to a very large extent," he said.

Amazon also said revenue from shipping — which includes revenue from Amazon Prime, its membership-based two-day shipping program, and Fulfillment by Amazon, which is its third-party shipping program — rose less than 1 percent to $266 million.

The company's net shipping cost rose as well, though, climbing 32 percent year over year to $242 million.

During the quarter Amazon made 45,000 additional book titles available for its wireless electronic reading device, the Kindle, for a current total of 230,000. The company has not released sales figures for the Kindle device, and is widely believed to be releasing a new version in early February.

For the full year, Amazon earned $645 million, or $1.49 per share, on $19.2 billion in revenue. The company earned $476 million, or $1.12 per share, on revenue of $14.8 billion during 2007.

Source: Yahoo Tech

Faced with persistent subscriber losses and questions about its long-term prospects, Sprint Nextel Corp. is slashing its already shrinking work force by 8,000 people as it seeks to cut annual costs by $1.2 billion.

The layoffs, announced Monday, are just the latest attempt by the nation's third-largest cell phone carrier to right its financial ship in the face of tough competition and a brutal economy. They come slightly more than a year after the company cut 4,000 jobs and closed 125 retail centers as Chief Executive Dan Hesse, then new on the job, aimed to show he was serious about streamlining operations.

Sprint said it expects the latest round of layoffs, which represent a 14 percent reduction of its 56,000 employees, will be largely completed by March 31. The company said it will take a first-quarter charge of more than $300 million for severance and other costs.

About 850 of the layoffs are voluntary, through employees taking buyouts. They will make up about $45 million of the total severance costs, the company said in a securities filing.

In addition to the cuts, Sprint said it will suspend its 401(k) match for the year, extend a freeze on salary increases and suspend a tuition reimbursement program.

"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Hesse said in a news release. "Our commitment to quality will not change."

Sprint shares rose 3 cents, or 1.2 percent, to close at $2.49 on Monday.

The Overland Park, Kan.-based company has struggled since acquiring Nextel Communications Inc. in 2005. Technical problems, poor efforts to consolidate the two companies and stiff competition for feature-rich phones, such as the Apple Inc. iPhone on AT&T's service, have led many subscribers to switch.

As of Sept. 30, Sprint had 50.5 million subscribers, down 3.5 million from a year earlier. The falloff contributed to the $1.18 billion net loss that Sprint posted through the first three quarters of 2008.

"Given the current state of operations, (the layoffs were) probably the right thing for them to do," said analyst Christopher King at Stifel Nicolaus.

He doesn't see Sprint as a bankruptcy candidate, at least not for two years. "But certainly as you get into 2011, depending on how their operations shake out over the next couple of years, there could potentially be some concerns there," he said.

Another analyst, John Hodulik at UBS, wrote in a research note Monday that it might be difficult for Sprint to turn the tide of subscriber losses, given that nearly everyone already has a cell phone and few people switch between the major carriers.

The company's layoff announcement comes a month after AT&T Inc. announced it was cutting its work force by 4 percent, or 12,000 jobs, to deal with the effects of the recession and the continued erosion of its traditional wireline business. However, AT&T's wireless arm has been gaining subscribers, as have Verizon Wireless and T-Mobile USA.

Sprint Nextel has had some bright spots. It recently announced a new $50 per month unlimited voice and data plan under its Boost prepaid brand, which doesn't require customers to be tied to contracts. Analysts expect it to attract many people who can't qualify for or don't want to sign two-year contracts.

Also, Sprint will soon be the exclusive seller of the Palm Pre smart phone, a touch-screen device expected to rival the iPhone. The Pre is set to debut in the second half of this year.

Sprint spokesman James Fisher said the company hasn't determined how the newest layoffs will be divided between divisions or geographic locations, including suburban Kansas City, where it is the area's largest private employer.

But he said the company will likely avoid significant reductions in its customer service and network quality divisions, where Sprint has tried to improve in recent years.

One executive-level casualty is Kathy Walker, the company's chief information and network officer, who is leaving as of March 31.

Jeff Kagan, an Atlanta-based wireless analyst, said in a report that while Sprint's cost-cutting efforts are notable, they can't save the company on their own. He discounted the effect of the economy, since Verizon Wireless and AT&T have continued to do well.

"If the economy recovered tomorrow I think Sprint would continue to suffer," Kagan wrote.

Sprint also announced Monday it will release its fourth-quarter earnings on Feb. 19, more than a week earlier than originally scheduled.

The recession is killing jobs at an alarming pace, with tens of thousands of new layoffs announced Monday by some of the biggest names in American business — Pfizer, Caterpillar and Home Depot.

More pink slips, pay freezes and other hits are expected to slam workers in the months ahead as companies desperately look for ways to survive.

"We're just seeing the tip of the iceberg — the big firms," said Rebecca Braeu, economist at John Hancock Financial Services. "There's certainly other firms beneath them that will lay off workers as quickly or even quicker."

Looking ahead, economists predicted a net loss of at least 2 million jobs — possibly more — this year even if President Barack Obama's $825 billion package of increased government spending and tax cuts is enacted. Last year, the economy lost a net 2.6 million jobs, the most since 1945, though the labor force has grown significantly since then.

The unemployment rate, now at a 16-year high of 7.2 percent, could hit 10 percent or higher later this year or early next year, under some analysts' projections.

Obama called on Congress Monday to speedily enact his recovery plan, warning that the nation can't afford "distractions" or "delays."

With the recession expected to drag on through much of this year, more damage will be inflicted on both companies and workers.

The mounting toll was visible Monday as roughly 40,000 more U.S. workers got the grim news.

Pharmaceutical giant Pfizer Inc., which is buying rival drugmaker Wyeth in a $68 billion deal, and Sprint Nextel Corp., the country's third-largest wireless provider, said they each will slash 8,000 jobs.

Home Depot Inc., the biggest home improvement retailer in the U.S., will get rid of 7,000 jobs, and General Motors Corp. said it will cut 2,000 jobs at plants in Michigan and Ohio because of slow sales.

"We are seeing no improvement in labor market conditions," said Sal Guatieri, senior economist at BMO Capital Markets Economics. "This year could be as bad as last year in terms of layoffs."

In response to deteriorating business conditions, Caterpillar Inc., the world's largest maker of mining and construction equipment, disclosed nearly 20,000 job cuts, most of which already have been made. They include 5,000 new layoffs of white collar workers, which will occur globally by the end of March.

Earlier actions included the elimination of 2,500 Caterpillar workers through a buyout offer announced in December, the termination of about 8,000 contract and temp agency workers, and the reduction of 4,000 full-time factory workers through firings and buyouts.

Texas Instruments Inc., which makes chips for cell phones and other gadgets, will cut 3,400 jobs due to slumping demand. The Dallas-based company said Monday it will slash 12 percent of its work force — 1,800 jobs through layoffs and another 1,600 through voluntary retirements and departures. And Brooks Automation Inc. said it plans to get rid of 350 jobs, or 20 percent of its work force. It will be the second round of cuts for Brooks, which makes software and equipment for chip manufacturers.

Oilfield services provider Halliburton Co. said it will eliminate jobs in markets particularly hard hit by the recession, though it didn't provide details. Its larger rival Schlumberger Ltd. said last week it will cut up to 5,000 jobs worldwide in the first half of 2009 and consider further reductions this spring.

The flurry of layoffs comes on the heels of similar action by big-name companies just last week.

Microsoft Corp. said it will slash up to 5,000 jobs over the next 18 months. Intel Corp. said it will cut up to 6,000 manufacturing jobs. And United Airlines parent UAL Corp. said it would get rid of 1,000 jobs, on top of 1,500 axed late last year.

And there's no end in sight. In a survey by the National Association for Business Economics, 39 percent of forecasters predicted job reductions through attrition or "significant" layoffs over the next six months, up from 32 percent in the previous survey in October. Around 45 percent in the current survey anticipated no change in hiring plans. About 17 percent thought hiring would increase.

A new report by the placement firm Challenger, Gray & Christmas found that companies are often turning to a creative combination of measures to cut costs — beyond layoffs. Those measures include pay freezes or reductions, forced vacations, travel cutbacks and the elimination of year-end bonuses.

"Many companies cannot cut their payrolls as deeply as they have in previous downturns, simply because they did not do as much hiring during the most recent expansion," said John Challenger, president of the firm. "As a result, they are forced to find alternative ways to keep costs down."

Not all the economic news was as grim Monday. Sales of previously owned homes and a separate barometer of economic activity each logged unexpected gains in December. But economists didn't view them as signs of improvement.

"Keep the party hats in boxes and the Champagne in the cellar," said Bernard Baumohl, chief global economist at the Economic Outlook Group. "It's one month's set of data and they tell us little about the future."

Economists said the uptick in home sales was due to sinking prices spurring buyers. In the other report, a government-influenced balloon in the nation's money supply largely affected the outcome.

Wall Street closed moderately higher. The Dow Jones industrials rose 38.47,or 0.48 percent, to 8,116.03, after briefly moving into negative territory.

The National Association of Realtors said sales of existing homes rose 6.5 percent to an annual rate of 4.74 million last month. Buyers took advantage of dramatically lower prices, especially in distressed states like California, Florida and Nevada, where foreclosures are soaring.

The nationwide median sales price sank to $175,400, down 15.3 percent from a year ago. That marked the biggest annual drop on records going back to 1968. The median is the middle point, where half the homes sell for more and half for less.

For all of last year, existing-home sales totaled 4.9 million, down more than 13 percent from the previous year, and the lowest since 1997.

Meanwhile, the Conference Board's monthly forecast of economic activity rose 0.3 percent in December. But that pickup was influenced mainly by federal efforts to ease the credit crisis, which caused the supply of money to expand. If the jump in the money supply were excluded, the board's index would have dropped sharply, economists said.

The national economy, meanwhile, is continuing to backslide.

Many analysts predict the economy will have contracted at a pace of 5.4 percent in the fourth quarter when the government releases that report Friday. If they are correct, that would mark the worst performance since a 6.4 percent drop in the first quarter of 1982. The economy is still contracting now — at a pace of around 4 percent, according to some projections.

Source: Yahoo news on Business

More novel than short story; more ballad than poem -- most writers agree that restraint and plain speaking were the qualities that distinguished President Obama's inaugural address. Long on plot (and it will thicken), it did what literature does best: the backward glance, the standing on shoulders, the salute to ancestors and other sources of wisdom.

"He is our first (in the best sense of the word) aristocratic president," said author and journalist Malcolm Gladwell. "Bush was a buddy. Clinton was the kindly uncle. Obama is a prince."

And yet, Obama is also a writer, and writers were not at a loss for words. Author Ron Carlson was watching the president's syntax. "What courage," he said, "to use a complex sentence talking to a million people! By expecting the best of us, he just might get it."

Nonfiction writer Mark Kurlansky said the speech "was the most sophisticated view of the world and our role in it of any inaugural address in history."

Others felt the call to action. "With an Obama speech, listening is sometimes enough," said Pulitzer Prize-winner Thomas Powers, "but not this time. The inauguration speech is one we ought to read. It strikes me as clear and determined and grounded in confidence that of course we are still in the middle of the American story, not nearing the end."

Author Susan Straight watched the speech with her two mixed-race daughters. Afterward, they discussed their ancestors, the women in their family who never had birth certificates. "We talked about how hard these women had worked, orphaned and enslaved and desperate, to keep their children alive and get them educated."

Other writers praised the absence of the first person singular. "The word that stood out the most for me," said author Marisa Silver, "was the word 'we.' Taking the 'I' out of the equation makes us keenly aware of the power and responsibility that we, each of us, have to make differences."

USC professor Leo Braudy was moved to think about the difference between general forces in history and the force of the individual, particularly someone who, like Obama, embodies past polarities. "This is how history moves," he said. "It's all well and good to talk about the rise of liberalism or the fall of communism, but really it's the individual who carries these forces within him and is able to move history forward."

Some, like memoirist Patricia Hampl, praised Obama's plain speaking. "I was glad," she says, "that he denied himself rhetorical flourishes and gave a speech as refined and restrained in its power so that political language itself was restored to its greatest value -- saying what the speaker means."

Historian Mike Davis also praised Obama's restraint, calling it a "brilliantly modulated speech that perfectly showcased Obama's gravitas while revealing as little as possible of his actual passions. Hopefully we can now take a break from patriotic celebrations and incantations of 'hope' and return to rescuing the survivors from the wreckage of the Bush era."

Clinton speechwriter and author Ted Widmer liked the obvious lack of "elaborate, orotund, speechwriter language," the "tight language, short sentences and strong images," and the many references to past presidents, although he noted the absence of Lincoln quotes.

Novelist Stacey D'Erasmo had some writerly observations. She was struck by how much Obama looked "like an ordinary man on his way to work, alone. When he looked down during the various opening remarks, he actually looked like he was thinking." She felt she was observing his transformation: "We know that we are watching him become something else, something we can't, entirely, understand. Subtly, we want him to explain it to us: What does his power mean?"

In pre-speech commentary, Reagan speechwriter Peter Robinson (famous for penning the phrase, "Mr. Gorbachev, tear down this wall") told a reporter, "Writing is writing. It's a job." A good inaugural speech, he said, contains expectations, while allowing people to fully enjoy the moment.

As many writers will tell you, this is what writing can do: make the complex sound like plain speaking, contain and channel the emotions, create a kind of bridge from the heart to the mind.

"Here's a guy," Ron Carlson said with obvious admiration, "capable of his next idea."

Read on LA Times

Last year was brutal for real estate markets in Florida, California and Arizona. This year won't be much better.

In Palm Bay, Fla., a 563,000-person metro area on the central Florida coast, it's not just lush palm trees dotting the landscape--foreclosure signs are all over.

Partly to blame? The area's median home sale price has fallen by half since 2006, from $238,000 to $110,000, according to Trulia.com, an online real estate data provider. This has left many homeowners owing more on their mortgages than their homes are worth.

As a result, almost 1,800 homes are in the process of being repossessed by lenders--twice as many houses as were sold in the six months between May and November.

And more foreclosures are inevitable as homeowners cut their losses and walk away from their mortgages. There are already so many empty homes that the city passed an ordinance two months ago requiring lenders to identify which abandoned properties they owned.

Farther south in Miami, it's a similar story. Online real estate data provider Zillow.com estimates that 96% of Miami's houses are losing value. Median sales prices were 22% lower than last year in the third quarter.

Out West, in Las Vegas, a crushing 98% of homes are losing value and foreclosures account for 45% of all transactions, according to Zillow.

All three top a list of the country's top 25 worst housing markets in 2009. Provo, Utah, and Fort Lauderdale, Fla., round out the top five.
Behind the Numbers

To find them, we asked Moody's Economy.com to compile a list of the country's real estate markets that are furthest from recovery. Moody's looked at the country's Census-defined metro areas--including metropolitan and micropolitan statistical areas--with populations over 500,000 and prepared forecasts through 2011. They then compared them with prices in the second quarter of 2008, the latest figures available, to calculate how far prices will likely fall before reaching bottom.

In Palm Bay, real estate values are expected to fall another 41.4% before bottoming late next year. Miami could be in for a similar decline, and Fort Lauderdale is forecast to drop another 30%.

There are more familiar names on the worst-off list: Los Angeles and Phoenix where foreclosure signs and half-built exurbs serve as constant reminders of the real estate frenzy that lead to this crisis.

In Las Vegas, where speculation moved out of the casinos and into the property market, prices have another 43% to lose, according to Moody's.

In Phoenix, too many houses and too much speculation sent property prices into a tailspin two years ago. But the bottom may be in sight late this year--after another 31% drop.

Tucson, Ariz., also looks like it's close to flattening out--after an estimated 33% fall by the end of next year.

For other towns on our list, there's still plenty of time to get 'em while they're cold. Most of these troubled markets--including Santa Ana, Calif.,Orlando, Fla., and Jacksonville, Fla.,--won't even start to recover until next year or the year after.

That's even though real estate prices, on average, across the country should hit bottom by the end of this year, according to Moody's forecasts, after an average 15% drop.

It's not just the cities already facing massive foreclosures that are poised to further stumble; this year the gloom is spreading to the country's second-home markets.

Many of these places were doing well until recently as retiring boomers and investors bought property where they played. But the market for second homes followed Wall Street into a deep dive last year. Because the downturn hit many of these markets late, the worst is yet to come.

Just over a year ago, for example, property prices in Salt Lake City were still rising, even though they were falling just about everywhere else.

By the third quarter of 2007, the median home sold for $247,000 versus $203,000 in 2006. Prices haven't fallen much yet; the median price in late 2008 was $230,000, according to the National Association of Realtors.

But Salt Lake City, which is surrounded by some of the best ski resorts in the West, is just starting to feel the effects of the drop-off in second-home buying. Prices are set to fall 29% over the next two years, according to Moody's forecasts.

Provo, Utah, and Boise City, Idaho, are also headed down with the drop in nearby ski home sales, says Mark Zandi, chief economist for Moody's Economy.com.

Honolulu hurt by the drop in buyers from Asia and California, is beginning a long and slow descent, with real estate prices forecast to drop 31% before hitting bottom in 2011.

There is another region where the worst may be to come: New York City-area metros. Housing values in Newark, N.J., could fall 26%.

Likewise, Edison, N.J., is also among the mid-sized metro areas expected to see the steepest drops this year. But the worst could be over by the end of 2009 for New York's satellite cities.

Manhattan, now at the epicenter of the financial crisis, is noticeably absent from the top 25 weakest markets list. So far, the city has been isolated from the popping bubbles in the rest of the country.

Property prices were rising in Manhattan until early last year. Zandi believes Manhattan could be spared a steep drop. He expects a fall of around 20%. Even if big bankers lose their bonuses, "Manhattan is still supported by international demand," he says.

That prediction may prove conservative. The value of new contracts signed have already dipped 15% to 20% in the fourth quarter, according to a Beige Book report from the U.S. Federal Reserve last month.

The report said much of the activity came from "desperate sellers," so it may not be a fair gauge of where prices will go from here.

Of course, that depends on how many more sellers become desperate.