Compiled by Julie Leupold
TOP STORIES
The parent company of Tustin-based Cherokee International Corp., a maker of power supply gear for electronics, plans to cut 233 local jobs. Last year Cherokee was bought by Lineage Power Holdings Inc., part of Los Angeles-based private equity firm Gores Group LLC, for $105 million. Lineage is moving production to a plant in China with administrative jobs staying in Tustin.
Google Inc. is shedding an unprofitable business it first got into via an Orange County acquisition. Google said it’s looking to exit its radio advertising business because it did not “have the impact we hoped for.” The company first got into the business with its 2006 buy of Newport Beach’s dMarc Broadcasting Inc., which it paid more than $100 million for. It folded dMarc into a division called Google Radio and moved it to its Irvine offices in 2006. Some 40 workers would see job cuts. It was unclear how many are from the Irvine office.
TECHNOLOGY
An analyst cut his rating on Lake Forest-based disk drive maker Western Digital Corp. from “strong buy” to “buy.” Needham & Co. analyst Richard Kugele based his downgrade on an oversupply of drives for the next few months. Also last week, Robert W. Baird & Co. analyst Jayson Noland upped his rating on Western Digital to “outperform” from “neutral.” The two analysts aren’t that far apart: Both expect a rebound sometime this year after recent production cuts and as demand for drives grows.
Aliso Viejo’s Quest Software Inc. reported fourth-quarter results that surpassed sales expectations but fell short on profits. Quest reported sales of $202 million, up 8% from a year earlier and beating analysts’ expected $199 million in revenue. Excluding charges, Quest saw profits of $39 million, up 35% from a year earlier but short of the $34 million analysts were looking for.
A federal judge dismissed Broadcom Corp. cofounder Henry “Nick” Nicholas as a defendant in a suit by shareholders over the backdating of stock options. Judge Manuel L. Real ruled that the 2008 lawsuit was filed more than five years after Nicholas resigned in 2003 and was beyond the statute of limitations. Broadcom cofounder Henry Samueli, former chief financial officer Bill Ruehle and others remain as defendants.
HEALTHCARE
St. Joseph Health System reached a $35.7 million deal to buy South Coast Medical Center in Laguna Beach. The hospital’s emergency room will stay open, and the 208-bed hospital will get a new name. It will be run by St. Joseph’s Mission Hospital in Mission Viejo.
Fullerton-based Beckman Coulter Inc. reported a big jump in fourth-quarter profits that fell just shy of Wall Street expectations and upped its profit forecast for 2009 while being cautious about revenue. The maker of medical testing equipment and supplies posted a fourth-quarter profit of $77.2 million, up 72% from a year earlier. Still, the profit came in just shy of the $77.8 million analysts were expecting. Sales for the quarter grew a modest 2.8% to $811.3 million, below Wall Street’s expectations of $811.8 million.
REAL ESTATE
Two Orange County residents are among those suing Marcus & Millichap Real Estate Investment Services, alleging the real estate services firm used dummy corporations and “sham” leases to inflate the value of properties sold as retirement investments to individual investors. The suit, filed in federal court in San Jose, charges that Marcus & Millichap conspired with co-defendants Jack Waelti, a Florida businessman, and Paul Morabito, a former Laguna Beach businessman and early adviser to Sheriff Sandra Hutchens, to swindle 16 investors out of tens of millions of dollars. The plaintiffs, including OC residents Allen Ernest Hom and Mary Cheathem, seek $70 million in damages.
APPAREL
An analyst downgraded Huntington Beach-based Quiksilver Inc.’s stock to “average” from “above average,” saying the company’s profits are “at risk” due to its heavy debt and the retail sector’s downturn, according to Caris & Co.’s Claire Armstrong Gallacher. Lingering debt from 2005’s $560 million buy of Rossignol is weighing heavily on Quiksilver, which has seen its stock fall more than 80% in the past year.
The Orange County Probation Depart-ment started laying off dozens of workers this week to deal with a projected $8.2 million budget shortfall. One hundred employees in the department received notices that they might be laid off, although only 58 positions will be eliminated. Some of those notified were senior county employees who can opt to take a demotion in order to keep their jobs. Laid-off employees will work their last day Feb. 27.
OTHER NEWS
Restructuring telescope maker Meade Instruments Corp. is moving its headquarters to a 26,000-square-foot building in the Irvine Spectrum. It now leases 160,000 square feet of space nearby in the Spectrum. In other Meade news, Steven Muellner resigned as its chief executive and will be replaced by Steve Murdock, who served as chief executive of the Irvine telescope and optical equipment company from 2003 to 2006. Meade also announced the resignation of directors Harry Casari and James Chadwick.
Newport Beach-based Ambassadors International Inc. said it’s selling off businesses to focus on cruises and is moving its headquarters to Seattle. The travel services company said it plans to move in the next several months. Ambassadors runs riverboat, Alaska, Hawaii, Mediterranean and Caribbean cruises. The company also said Art Rodney, a 30-year cruise veteran, would replace Chief Executive Joe Ueberroth as chairman, who also is stepping down as chief executive.
