- The Washington Times - Wednesday, March 19, 2003

Here is a look at more of Wednesday's top business stories:


Applications to refinance mortgages rise

WASHINGTON, March 19 (UPI) — The Mortgage Bankers Association of America said homeowners filed a record number of applications to refinance home mortgages last week even as mortgage rates inched above four-decade lows.

The MBA said its gauge for refinancing for the week ended March 14 rose 5.2 percent to a record high of 9,387. A record 80.5 percent of applications were refinancings. The group noted its index is more than five times higher than a year ago.

The group said its weekly index gauging overall mortgage applications for the week rose 4.4 percent to 1,673, also an all-time high.

The group's seasonally adjusted mortgage index for home purchases improved 0.7 percent to 347.3 from the prior week.

While the refinancing index scaled new heights, the purchase index has been bouncing in the low-to-mid 300 range since early February.

Interest rates, excluding fees, on 30-year fixed-rate mortgage loans, the mostly widely held home loan in the United States, averaged 5.61 percent, up 0.19 percentage point from the prior week's all-time low but 1.5 percentage points below the level a year ago, the MBA said.

The mortgage group's weekly survey, which began in 1990, covers about 40 percent of all home loans made each week by banks, thrifts and mortgage lenders.


General Mills earnings nearly triple

MINNEAPOLIS, March 19 (UPI) — General Mills Inc. said its fiscal third-quarter net income nearly tripled as the company continued to reap the benefits of its 2001 acquisition of the Pillsbury baking business.

General Mills, maker of Cheerios cereal and Betty Crocker baking mixes, said its third-quarter net income for the period ended Feb. 23 surged to $240 million, or 63 cents a share, from $82 million, or 22 cents a share during the same period a year earlier.

The latest quarter included $15 million, or 4 cents a share, for transaction and integration costs related to its October 2001 acquisition of Pillsbury. Last year, the company booked $25 million, or six cents a share, in charges associated with the Pillsbury acquisition.

Excluding items, earnings more than doubled to $255 million, or 67 cents a share, compared with earnings of $107 million, or 28 cents a share, a year earlier.

The results were slightly higher than the company's previous guidance for earnings before items at 65 cents to 66 cents a share.

Sales climbed 11 percent to $2.65 billion from $2.38 billion. World-wide unit volume grew 5 percent, and unit volume rose 7 percent at the U.S. retail business.

General Mills noted that the latest and year-earlier quarters include results from Pillsbury.

U.S. retail operations saw net sales grow 14 percent to $1.91 billion, and operating profit nearly double to $449 million.

Big G cereals' unit volume rose 16 percent amid strong growth by Honey Nut Cheerios, Cheerios, Cinnamon Toast Crunch and Total brands.

Chairman and Chief Executive Officer Steve Sanger said the quarter was further evidence of the strength of combining Pillsbury and General Mills.

"After a strong first half, our growth accelerated in the third quarter with unit volume up 5 percent worldwide and up 7 percent for our U.S. retail businesses. Net sales grew even faster than volumes, and the result was stronger than expected earnings for the period," Sanger said.

General Mills also said it expects to book $15 million to $20 million in pretax costs related to the Pillsbury acquisition in the fourth quarter.

The company also raised its profit outlook. General Mills now expects to post earnings before items for the fiscal year of $2.62 to $2.64 a share, up from a previous estimate of $2.60 to $2.62 a share. The company expects net income of $ 2.42 to 2.44 a share for the fiscal year.

General Mills continues to expect fiscal 2004 sales to increase at least 6 percent, fueled by new products and the benefit of a 53rd week in the fiscal period.


Earnings jump 52 percent at Bear Stearns

NEW YORK, March 19 (UPI) — Bear Stearns Cos. Inc. said its fiscal first-quarter net income for the period ended Feb. 28 surged 52 percent, buoyed in part by record revenue at its fixed-income division.

Bear Stearns said its first-quarter net income climbed to $274.3 million, or $2 a share, from $180.5 million, or $1.29 a share during the same period a year ago.

Analysts on Wall Street had expected the firm to post a net income of $1.35 cents a share, according to Thomson First Call.

Total revenue rose 7 percent to $1.84 billion from $1.72 billion. Net revenue, or total revenue minus interest expenses, jumped 22 percent to $1.52 billion from $1.24 billion a year ago.

Bear Stearns said it benefited from strength in its capital markets segment, which includes institutional equities, fixed income and investment banking. Net revenue climbed 34 percent to $1.26 billion at the capital markets unit, and jumped 44 percent to a record $791.2 million at the fixed-income business.

The firm attributed the solid performance at its fixed-income operations to record net revenue in the mortgage and credit product areas.

Bear Stearns said total noninterest expenses increased 13 percent to $1.09 billion in the quarter.

Chairman and chief executive officer James E. Cayne said, "I am extremely pleased to report this quarter's outstanding results. While market conditions continue to be difficult, we reported our best quarterly operating earnings in our history as a public company.

"Our fixed income franchise achieved record performance while the equity and equity-related businesses remained stable in extremely challenging market conditions. We continue to focus on selectively hiring key talent, upgrading our businesses and growing our franchise while maintaining our strict risk and expense discipline," Cayne said.

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