Archive for March, 2010

Rite Aid predicts its loss may grow in fiscal 2011 (AP)

Wednesday, March 31st, 2010 | Finance News

NEW YORK – Drugstore chain Rite Aid Corp. said Wednesday it may post larger losses in its current fiscal year as many shoppers remain out of work and it ramps up spending on new programs.

Rite Aid is preparing to roll out a new customer loyalty program called Wellness Plus. The Camp Hill, Pa., company is planning to have pharmacists who can administer flu shots at many stores in time for the next flu season.

The company's fiscal 2011 outlook fell short of analyst estimates. Rite Aid forecast a loss of $355 million to $570 million, or 41 cents to 65 cents per share. Revenue was estimated at $25.2 billion to $25.6 billion. According to Thomson Reuters, analysts expected a loss of 36 cents per share and $25.8 billion in revenue.

At stores open at least a year, sales could grow as much as 1 percent or fall as much as 1 percent, the company said.

Rite Aid said its forecasts are based on current trends, including a weak economy with high unemployment. It announced plans for the new rewards program in September, saying it would emphasize pharmacy sales. Rite Aid currently offers discounts on prescription drugs and store brand items through its Rx Savings Card.

In morning trading, shares of Rite Aid fell 20 cents, or 12 percent, to $1.49.

In the three months that ended Feb. 27, Rite Aid lost $210.6 million, or 24 cents per share, compared with a loss of $2.3 billion, or $2.67 per share, in the prior-year quarter.

A year ago, with its share price plunging, Rite Aid wrote down the value of its assets by $1.81 billion. That included a $1.2 billion write-down on the value of the Brooks Eckerd drugstore chain. The company bought 1,850 Brooks Eckerd stores for $2.36 billion in June 2007, but sales at those stores have remained weak.

Revenue fell 4 percent to $6.46 billion from $6.71 billion as the company has been closing underperforming stores.

Analysts expected a smaller loss of 19 cents per share and revenue of $6.49 billion.

"It was a difficult quarter with continued weak consumer demand, a weaker cough cold and flu season than last year and continued pressure on pharmacy reimbursement," said Chairwoman and CEO Mary Sammons. The company said it made smaller profits on sales of new generic drugs and lower reimbursement rates. Sales at stores open at least one year declined 2.4 percent.

Rite Aid lost $515.6 million, or 59 cents per share, in fiscal 2010. That was down from $2.94 billion, or $3.49 per share, in fiscal 2009. Its sales fell 2 percent to $25.67 billion from $26.29 billion. Sales at stores open at least one year slipped 0.9 percent.

The company closed 22 stores during the fourth quarter and plans to close another 80 in fiscal 2011. It operated 4,777 at March 27.

Rite Aid also said sales decreased in March due to a store closings and a decline in pharmacy revenue. Sales of other items got a boost because Easter is earlier in April this year.

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Google: Online attacks aimed at Vietnam critics (AP)

Wednesday, March 31st, 2010 | Finance News

HANOI, Vietnam – Google Inc. says it has found another case of cyberattacks being used to suppress political dissent, this time to silence opponents of a Vietnamese mining project that involves a state-run Chinese company.

Computer security firm McAfee said the perpetrators may be linked to Vietnam's Communist government.

Last week, Google shut down its search operations in China, Vietnam's northern neighbor, after complaints of cyberattacks and censorship there. Google now redirects search queries from China's mainland to the freer Chinese territory of Hong Kong.

Google said the attacks in Vietnam were less sophisticated but were also intended to suppress opposing views.

It said it was drawing attention to them because they underscored the need for the international community "to take cybersecurity seriously to help keep free opinion flowing."

The attacks targeted "potentially tens of thousands" of people who downloaded software that allows Windows computers to use the Vietnamese language, a posting on Google's online security blog said Tuesday.

It said the "malware" infected the computers, spying on the users and attacking Internet sites containing messages of political dissent.

"Specifically, these attacks have tried to squelch opposition to bauxite mining efforts in Vietnam, an important and emotionally charged issue in the country," Google engineer Neel Mehta wrote in the posting.

The mining project involving a subsidiary of Chinese state-run aluminum company Chinalco is planned for Vietnam's Central Highlands and has attracted strong opposition — including from Vietnam's most famous military hero — because of fears it would cause major environmental problems and lead to Chinese workers flooding into the strategically sensitive region.

McAfee, which has investigated the malware, also discussed the attacks in a blog posting Tuesday.

"We believe that the perpetrators may have political motivations and may have some allegiance to the government of the Socialist Republic of Vietnam," wrote George Kurtz, McAfee's chief technology officer.

Vietnamese officials could not immediately be reached for comment Wednesday.

Like China, Vietnam tightly controls the flow of information and has said it reserves the right to take "appropriate action" against Web sites it deems harmful to national security.

Last fall, the government detained several bloggers who criticized the bauxite mine, and in December, a Web site called bauxitevietnam.info, which had drawn millions of visitors opposed to the mine, was hacked.

The malware apparently began circulating at about that time, according the McAfee blog. It said someone hacked into a Web site run by the California-based Vietnamese Professionals Society and replaced a keyboard program that can be downloaded from that site with a malicious program.

Among the bauxite mine's opponents is the legendary 98-year-old Gen. Vo Nguyen Giap, who led Vietnamese forces in victories against French and U.S. troops. Giap's photograph is prominently featured on the bauxite Web site.

Suspicion of China runs deep in Vietnam, which has a long history of conflict with its northern neighbor.

The two countries fought a bloody border war in 1979 and have ongoing disputes about two archipelagoes in the South China Sea, the Spratlys and the Paracels.

While the Vietnam cyberattacks did not target Google, the company says its dispute with Beijing was triggered by a hacking attack that emanated from China and attempts to snoop on dissidents' e-mail.

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On the Net:

Google Online Security Blog:

http://googleonlinesecurity.blogspot.com/2010/03/chilling-effects-of-malware.html

McAfee Security Insights Blog:

http://siblog.mcafee.com/cto/vietnamese-speakers-targeted-in-cyberattack/

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European stocks up modestly ahead of US data (AP)

Wednesday, March 31st, 2010 | Finance News

LONDON – European stock markets rose modestly Wednesday following a late rebound on Wall Street in the previous session and ahead of a raft of U.S. economic data, though the long Easter break kept trading volumes light.

The FTSE 100 index of leading British shares was up 13.76 points, or 0.2 percent, at 5,686.08 while Germany's DAX rose 13.16 points, or 0.2 percent, to 6,155.61. The CAC-40 in France was 7.64 points, or 0.2 percent, higher at 3,995.05.

Wall Street was poised to dip slightly following a flat performance on Tuesday — Dow futures were down 10 points, or 0.1 percent, at 10,844 while the broader Standard & Poor's 500 futures fell 1.5 point, or 0.1 percent, to 1,167.90.

Tim Hughes, head of sales trading at IG Index, said a raft of U.S. economic data later, including the monthly private payrolls report from ADP, a manufacturing survey for the Chicago region and crude oil inventory figures "all have the potential to add a small amount of volatility to an otherwise bland trading landscape later in the day."

The big event this week is Friday's U.S. nonfarm payrolls data for March — traditionally this can set the market tone for a week or two but this month's figures will be released as many traders head off for the Easter break. All major stock indexes in Europe and the U.S. are closed for Good Friday.

The report is expected to show employers added 170,000 jobs in March. That would be only the second increase since the recession began in late 2007.

The euro, meanwhile, rallied 0.4 percent to $1.3464 after official figures showed inflation in the 16 countries that use the euro spiked to its highest level in 15 months during March. The dollar rose 0.6 percent to 93.36 yen.

In its preliminary estimate for the year to March, Eurostat, the EU's statistics office, said consumer prices in the eurozone rose by 1.5 percent, way above February's equivalent rate of 0.9 percent and market expectations for a more modest increase to 1.2 percent.

Eurostat did not provide any more details but a fuller analysis of why inflation jumped to its highest level since December will emerge on April 16, when a broader analysis is published.

Despite the euro's advance Wednesday, the currency continues to be dogged by worries surrounding Greece's debt crisis.

Even though the European Union finally agreed a backstop for the debt-laden country last week, investors remain concerned about the Greek government's ability to tap the financial markets for more cash — two bond issues this week met with muted success.

The most visible sign of unease in the markets is in the spread between Greek and German 10-year bond yields — the so-called spread between the two is indicative of investor unease, rising as it has to over 3.4 percentage points.

The current spread is more or less the same as before the rescue plan's announcement last Thursday and up from the 3.06 percentage points on Monday.

In Asia, trading was fairly lackluster. Japan's benchmark Nikkei 225 stock average ended down 7.20 points, or less than 0.1 percent, at 11,089.94 while Hong Kong's Hang Seng fell 135.44 points, or 0.6 percent, at 21,239.35. south Korea's index fell less than 0.5 percent to 1,692.85.

Australia's benchmark dropped 0.8 percent and China's Shanghai index was off 0.6 percent.

Benchmark crude for May delivery was up 49 cents at $82.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 20 cents to settle at $82.37 on Tuesday.

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