LOCAL, STATE
Chip-gear orders fall in October
North American orders for semiconductor equipment fell 28 percent in October as chip makers cut back spending on new plants, concerned that demand will shrink in a global recession.
Orders dropped to $843 million last month from $1.18 billion in October 2007, the trade group Semiconductor Equipment & Materials International said Tuesday.
Applied Materials and KLA-Tencor, the largest U.S. chip-equipment manufacturers, both announced plans in the past week to cut more than 10 percent of their workers. Chip-making customers are scaling back expansion plans as consumers stem purchases of computers, electronics and mobile phones.
The book-to-bill ratio, a gauge of industry health, was 0.93 in October, meaning chip-equipment producers in North America received $93 in new orders for every $100 in products sold. A ratio of less than 1 signals that the industry is shrinking. The figure has been below 1 since January 2007.
TiVo to cut workforce
TiVo will cut an unspecified number of jobs as part of an effort to reduce expenses.
The action will result in costs of about $1 million in the fiscal fourth quarter, mostly from the firings, San Jose-based TiVo said Tuesday in a regulatory filing. The company had 495 employees at the start of the year.
The company lost 178,000 net subscribers in the second quarter to finish with a total of 3.6 million.
NATION
Wholesale price drop biggest ever
Wholesale prices in October experienced the biggest one-month drop on records that go back more than 60 years, illustrating the impact falling energy prices and fears of a prolonged recession can have on inflation.
Wholesale prices dropped by a record 2.8 percent last month, reflecting the fact that energy prices decreased by the largest amount in 22 years. After spending most of the year worrying about surging costs for energy, food and other commodities, analysts found it remarkable that prices could reverse so quickly.
Economists said they did not believe the country would experience outright deflation, which was last faced in the U.S. in the 1930s when the nation suffered through the Great Depression and a long, debilitating bout of falling prices.
Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. But they believe that retreating inflation pressures will give the Fed the room to cut interest rates further to combat the economic weakness.
Home Depot beats expectations
Home Depot gave investors a welcome surprise Tuesday, posting a better-than-expected third-quarter profit and offering Wall Street a second straight day of good news for the battered home improvement sector.
But the 31 percent drop in earnings still shows just how badly the chain has been pummeled by the economic meltdown — which executives warned was unlikely to abate anytime soon as they predicted a steeper drop in full-year sales.
Same-store sales — a retail industry metric of sales at stores open at least a year — fell 8.3 percent during the period as shoppers eschewed everything from custom kitchens to hardwood floors amid fear of a prolonged recession and the turmoil affecting the financial markets.
Home Depot’s results came a day after a surprising third-quarter report from competitor Lowe’s, which topped Wall Street analysts’ profit estimates, even as earnings skidded more than 24 percent because shoppers were postponing big-ticket purchases.
Home Depot’s profit tumbled to $756 million, or 45 cents a share, for the three months ending Nov. 2, down from $1.09 billion, or 60 cents a share, in the same period last year. Revenue sank 6 percent to $17.78 billion. Analysts polled by Thomson Reuters expected earnings of 38 cents a share on revenue of $17.74 billion.
