|McNealy Mouthed |
Skates off into Sun set
1. Icing on the CakeSun Microsystems' ( SUNW) shining moment this week was short-lived.
Fans of the Santa Clara, Calif., server maker applauded late Monday when co-founder Scott McNealy announced his long-awaited decision to
"I think Jonathan is the right person to ride Sun forward on this next big wave," McNealy said of successor Jonathan Schwartz, a ponytailed longtime Sun executive. "The timing fit me to a T and it was my call," added McNealy.
The decision also fit Wall Street to a T. Sun rose to prominence during the 1990s boom, but has lost money by the bucketful since the tech bubble burst. Analysts have prodded the company to cut jobs by the thousands, a move McNealy has opposed.
But if Sun backers were counting on a decisive break with the McNealy era, Schwartz has other plans. "Realistically, we have been lockstep on a whole number of different issues, across the past four or five years especially," Schwartz said of McNealy on a conference call Monday. That march is already proving painful for some investors. On Monday's call, Schwartz quickly brushed off one analyst's published projection that the company could cut 12,500 jobs. After spiking as high as 7% on Monday's CEO-change announcement, Sun shares gave back their gains Tuesday to close flat. "What is going to differ between the two of us?" Schwartz said in response to one question Monday. "Scott plays hockey. I don't play hockey. Scott has a short haircut. And unless he pulls something out that mandates it as a part of my employment contract, I'm keeping my haircut." We have a feeling, Sun, that's not the kind of haircut investors were worrying about. Dumb-o-Meter score: 93. Just four days before he gave up the CEO post, McNealy dismissed a Wall Street Journal report that his resignation was imminent. "That rumor is about 22 years old and still chuggin," he wrote. To view Colin Barr's video take on Sun's entry in Five Dumbest this week,
2. RecountUnitedHealth ( UNH) snapped back at its critics this week. The Minnetonka, Minn., health insurer said Wednesday it would
|No Lucidity From Lucent |
No tells after Alcatel
3. Results OrientedThe future looks brighter than ever at Lucent ( LU) and Alcatel ( ALA).
This week, the merger partners posted their latest disappointing quarterly results. Lucent missed fiscal second-quarter
Not to worry, though. With a $13.4 billion
"Given the pending merger with Alcatel, we are discontinuing our practice of providing specific annual guidance," Lucent finance chief John Kritzmacher said Tuesday. "We will continue to focus on improving our operational performance as we prepare for successful integration with our merger partner." Maybe that's not such a bad idea. Lucent, after all, said this week that fiscal-2006 sales will drop from a year ago. Only six months back, the company was
|Down-to-Earth Satellite Company |
XM pats self on back for disclosure
4. Making WavesXM Satellite Radio ( XMSR) encountered some heavy static Thursday.
The Washington, D.C., pay-radio broadcaster posted
The company says the Federal Trade Commission (FTC) has asked for information about free trials, rebates, telemarketing, billing and customer complaints. The inquiry revives long-standing concerns about how XM and rival Sirius ( SIRI) count subscribers.
XM also says the Federal Communications Commission (FCC) found that one of its products wasn't in compliance with transmitter-emission standards, The Associated Press reports. The company says in a regulatory filing that it "is too early in the process to determine the significance, if any, of these matters to our business."
It's never too early for XM to blow its own horn, though. The company's take on the FTC probe, CEO Hugh Panero told analysts on a Thursday morning conference call, is that XM is "a good company." How's that? Well, XM received the FTC letter Tuesday. Without naming any names, Panero hastened to add, "Some companies could have held this." Yes, Hugh, complying with disclosure rules is quite a feather in your cap. Dumb-o-Meter score: 82. "I would like to avoid having these kinds of letters show up two days before our earnings call, but that's the journey we're on right now," Panero said, the AP reports.