Harold Maass of The Week The Best of Today's Business

NEWS AT A GLANCE

HP buys EDS to take on IBM

Hewlett-Packard said it will buy technology outsourcing firm Electronics Data Systems for $13.9 billion, in an acquisition that could help HP challenge IBM in computer consulting and services. The all-cash offer represents a premium of more than 30 percent over EDS's price yesterday before the news broke. (The Wall Street Journal) IBM was the top IT services firm last year, EDS was the No. 2, and HP was No. 5. (MarketWatch) It would be HP's biggest purchase since buying Compaq for $19 billion in 2002. Spending on computer services rose to $748 billion last year. "It would put Hewlett-Packard in the sweet spot of an IT spending trend," said CRT Capital Group analyst Ashok Kumar. (Reuters)

Credit Agricole looks to raise $9.1 billion

Credit Agricole, France's No. 3 bank, said it might raise $9.1 billion in a rights offer, after reporting a worse-than-expected 66 percent drop in quarterly profits, to $1.4 billion. The drop follows $1.87 billion inwritedowns at its Calyon investment banking unit. (Reuters) The writedowns, tied to the U.S. subprime market, will lead to changes at Calyon, including the probable ouster of CEO Mark Litzler. (MarketWatch) "They will downscale Calyon and reduce trading positions, and that's very good," said ING analyst Alain Tchibozo. Rival French bank Societe Generale reported a 23 percent drop in quarterly profit, to $1.7 billion, and Belgian bank Fortis posted a 31 percent decline, to $1.3 billion. (Bloomberg)

Wal-Mart profit rises as economy drops

Wal-Mart Stores, the world's largest retailer, reported a 6.9 percent rise in quarterly profit, to $3.02 billion, as consumers looked for discounts on staples as prices rose and the economy slumped. The earnings beat analysts' expectations. (Reuters) Revenue rose 10.2 percent, to $94.1 billion. Wal-Mart forecast for second-quarter earnings was at the low end of analysts' expectations, though. (CNNMoney.com) Wal-Mart went back to emphasizing its low prices, after working to expand its operations and customer base. Those changes are "rolling out," and "it's effective and timely with the pricing message they have right now," said analyst Sarah Henry at MFC Global Investment Management. (Bloomberg)

Not cashing in on corn

The prices of many farm goods are at record highs, but farmers aren't jumping to plant more of those crops. In fact, the amount of corn planted in the U.S. is expected to drop next year. That's because while the price for corn, rice, barley, and other crops is soaring, so is the cost of planting them -- corn and rice, for example, take more fuel and fertilizer to cultivate than other crops. With corn prices rising 35 percent over the past year, and growing costs jumping 47 percent, Charlie Hoppin switched to planting safflower. "I will know if I made the right decision about next December, but that's the nature of farming," he said. (Los Angeles Times, free registration)

BEST COLUMNS OF THE DAY

CEOs, ethics, and the golden parachute

"Lavish severance packages" for executives, regardless of performance, have "regrettably become common in recent years," says Knight Kiplinger in Kiplinger.com. The problem is that severance pay is negotiated "during the hiring process," and that should change. But any "ethical CEO" who "made a mess of their companies" should be "embarrassed" to accept their golden parachutes, especially when "blameless employees" are laid off as a result. CEOs are "not usually noted for their humility," but they can still "do the right thing" (and "head off shareholder suits") by just declining "a large portion" of their "undeserved windfall" -- or give it to "rank-and-file employees" laid off due to the CEOs mismanagement.

Finding the elusive airfare deal

Even with airfares rising, amid soaring fuel costs, great deals are "still around," says Peter Pae in the Los Angeles Times. "They're just harder to find," and you might have to search beyond Orbitz and Expedia. New carriers and routes are keeping prices down on some parts of the West Coast, and increased competition is also leading to bargain flights to Australia and some European cities, like London and Rome. Dig around. To find all the airlines that fly a certain route, try FlightStats-dot-com. And be prepared to be flexible with dates and even destinations. To get a good deal this summer, you have have to do "the unthinkable": go "where it's hot. (Think Texas in July.)"

GOOD DAY FOR: An air of optimism, after a U.S. Energy Department report said that the U.S. could meet 20 percent of its energy generation needs with wind power by 2030. That would cut coal consumption by 18 percent. Under "optimistic assumptions," the necessary investments in wind energy would total $197 billion, but it would also save $155 billion in fuel costs. (The Washington Post, free registration)

BAD DAY FOR: Good skin, as Japan is considering a facial examination system to enforce its legal smoking age of 20. The system, designed for vending machines, counts wrinkles and looks at sagging skin to verify age. Fujitaka Co., which makes the system, says it is accurate 90 percent of the time. The other 10 percent, mostly "minors that look older, and baby-faced adults," will have to insert their driver's license. (Reuters)

NOTED: Australia's Westpac Banking Corp. agreed to buy smaller rival St. George Bank for $17.5 billion, creating Australia's largest bank. The deal, one of the largest in Australia's corporate history, requires approval from the country's antitrust regulators. Currently, Westpac is Australia's third-largest bank, St. George the fifth-largest. The combined bank would have 10 million customers and 25 percent of Australia's home loan market. (AP in Yahoo! Finance)

This column was written by Peter Weber of TheWeekDaily.com.