Archive for August, 2010

Ford recalls 575,000 Windstar vans in U.S., Canada (Reuters)

Friday, August 27th, 2010 | Finance News

DETROIT (Reuters) – Ford Motor Co> is recalling about 575,000 Windstar vans in 21 cold-weather U.S. states and Canada from model years 1998 to 2003 because of the possibility that the rear axle may fracture due to corrosion, federal regulators reported on Friday.

The National Highway Traffic Safety Administration opened a preliminary investigation of the problem on May 13 after receiving 234 reports of rear axle fractures and two minor crashes. The number of complaints has risen to 950.

NHTSA said the design of the axle appears to allow it to collect road salt slush, leading to rust.

The recalls total about 463,000 in the United States, and the remaining in Canada, a Ford spokesman said.

Windstar owners will be asked to bring their vans into Ford or Lincoln-Mercury dealerships for inspection of the axle.

If the axle shows a crack, owners will be offered a repair or alternative transportation until parts are available, Ford told NHTSA.

If there is no cracking, owners will be informed when to return to have reinforcing brackets placed on the axle, Ford told NHTSA.

The recall affects vans in Canada and Connecticut, Delaware, the District of Columbia, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia and Wisconsin. (Reporting by Bernie Woodall; editing by John Wallace and Matthew Lewis)

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Intel warns of revenue shortfall on weak PC demand (Reuters)

Friday, August 27th, 2010 | Finance News

NEW YORK (Reuters) – Intel Corp (INTC.O) on Friday warned that third-quarter revenue could fall short of its own estimates by more than $1 billion on weaker-than-expected demand for personal computers.

The company, which dominates the market for PC microprocessors, said it expects third-quarter revenue to be $10.8 billion to $11.2 billion. That compares with its previous forecast of $11.2 billion to $12.0 billion, and analysts' average expectations of $11.5 billion, according to Thomson Reuters I/B/E/S.

It now sees gross margins in the period of 65 percent to 67 percent. It had previously forecast gross margins of 67 percent plus or minus a couple of points.

Shares of Intel were up 1.2 percent at $18.40 in active trading on Friday on Nasdaq.

(Reporting by Franklin Paul, editing by Gerald E. McCormick)

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Dell raises 3PAR offer to match HP bid (Reuters)

Friday, August 27th, 2010 | Finance News

NEW YORK (Reuters) – Dell Inc fired back in a bidding war for data storage company 3PAR Inc, matching a $1.8 billion offer by Hewlett-Packard Co and showing it isn't giving up yet against its bigger rival.

Dell said on Friday 3PAR had accepted its new $27-per-share bid, up 10 percent from its previous offer, in line with their agreement that allows Dell to match competing bids.

3PAR shares surged 9.4 percent to $28.50 in premarket trading, reflecting expectations for a higher offer from HP, which many see as the stronger player with $115 billion in annual revenue compared with Dell's $53 billion.

In a newspaper advertisement, placed overnight and appearing on Friday, HP launched a tender offer for all outstanding 3PAR shares at $27 cash each, showing it is prepared to be an aggressive suitor.

Dell's latest bid shows it wants 3PAR at least as much as HP does.

Dell, HP and other large technology vendors like International Business Machines Corp and Cisco Systems Inc have been acquiring companies and expanding into new technologies to offer corporate clients a wider range of products and services.

3PAR specializes in high-end data storage, a key part of "cloud computing" -- an increasingly popular technology that enables computer users to access data and software over the Internet, allowing companies to cut costs.

RISING VALUATIONS

August has been a particularly active month for deals. Intel Corp bid $7.7 billion for security software maker McAfee Inc last week.

But analysts say the bidding war over 3PAR has driven up valuations to unreasonable levels, raising the risk of the buyer overpaying.

Analysts say at current bids, 3PAR is valued at around eight times expected fiscal 2011 sales. Multiples above five are considered lofty in technology acquisitions.

3PAR has barely made a profit since its 1999 founding.

Some say, however, the company may be worth more than traditional metrics suggest, since it could grow exponentially with the massive sales channels of Dell or HP.

"Consistent with its previous rationale for the acquisition, Dell also believes that its global brand and broad global reach will dramatically accelerate 3PAR's revenue growth," Dell said in a statement.

Earlier this week, a survey by Reuters of nine fund managers and analysts found the average final price is expected to be about $29 per share, and that HP would prevail.

The bidding war, a rare occurrence in the tech sector, started earlier this week when HP bid $24 a share for 3PAR, topping Dell's $18-per-share deal.

Dell responded by striking a new deal with 3PAR at $24.30 per share and increasing the termination fee to $72 million from $53.5 million.

That prompted HP to come back with a $27-per-share bid on Thursday.

(Reporting by Ritsuko Ando and Soyoung Kim; Additional reporting by Paritosh Bansal; Editing by Derek Caney and John Wallace)

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