- The Washington Times - Thursday, April 24, 2008


• An activist shareholder urged Richmond-based Circuit City Stores Inc. to allow Blockbuster Inc. to examine its finances and start good-faith negotiations on the movie-rental chain’s bid for the struggling electronics retailer. Wattles Capital Management, which owns about 6.5 percent of Circuit City’s stock, said the company should discuss the buyout proposal with Blockbuster.

General Dynamics Corp. of Falls Church said its first-quarter earnings rose nearly 32 percent, led by big sales increases in the division that makes armored vehicles, tanks and combat equipment. Net income was $572 million ($1.42 per share), up from $434 million ($1.06) a year ago. Sales totaled $7 billion, up 11 percent. Both measures beat expectations.

• Three of the nation’s largest cable companies are pulling the plug on their cell phone joint venture with Sprint Nextel Corp., Comcast Corp., Time Warner Cable Inc. and Cox Communications Inc. said they have stopped marketing the service, which sold under the Pivot brand. The cable operators said the service proved too complicated to sell effectively.

Norfolk Southern Corp. of Norfolk, the fourth-largest U.S. railroad, said it expects to increase rates at least 4 percent this year, less than its main rival CSX Corp.’s expected 6 percent increase as the slower U.S. economy damps demand for some freight shipments. Both railroads serve the eastern half of the United States.

• Shares of Sallie Mae, the largest U.S. student loan provider, fell $1.19, or 6.8 percent, to $16.44 after three federal officials including Treasury Secretary Henry M. Paulson Jr. said the government couldn’t buy loans from education lenders through a Treasury Department bank.

Motorola settled claims by creditors of its bankrupt former satellite unit Iridium, based in the District, eliminating the last obstacle to winding up a nine-year bankruptcy. The deal ends litigation between the company and its failed unit, Iridium said in court documents. Iridium will distribute $16 million to unsecured creditors on claims of $1.6 billion, giving a one percent recovery.


General Motors placed second in global sales for the first quarter, falling behind Toyota. GM’s global sales for cars and trucks hit 2.25 million in the first quarter, while Toyota sold 2.41 million, the Detroit News reported. GM said sales declined 10 percent in the United States, but sales in Latin America, Africa and the Middle East gained nearly 20 percent.

McClatchy Co. swung to a loss in the first quarter as a weakening economy and competition from online rivals led to a 15 percent plunge in advertising revenues at its newspapers. The company, which publishes the Miami Herald, the Sacramento Bee and the Fort Worth Star-Telegram, lost $849,000 (1 cent) versus earnings of $9 million (11 cents) a year ago.

Schering-Plough Corp. reported a 48 percent plunge in first-quarter profit, mainly from costs related to its biggest acquisition ever, Organon BioSciences, but the drugmaker trounced expectations. Excluding $690 million in acquisition costs and other one-time items, net income would have been $862 million (53 cents), compared with $543 million (36 cents) a year ago.

• A former executive at Bristol-Myers Squibb is charged with lying to federal authorities about a patent deal involving the blood-thinning drug Plavix. The drug maker has already pleaded guilty and paid a $1 million fine. Now prosecutors are charging the company’s former senior vice president, Andrew Bodnar, with one count of making a false statement.

General Electric Chief Executive Jeff Immelt said the U.S. economy is the worst its been since the burst of the dot-com bubble and that housing hasn’t been in such dire straits since the Great Depression. He said things could get worse. Mr. Immelt told shareholders at the company’s annual meeting that GE will increase its planned cost cutting from $2 billion to $3 billion.

Apple Inc., maker of the Macintosh personal computer and iPod media player, agreed to buy closely held microprocessor designer P.A. Semi Inc., adding technology for low-power chips. Forbes.com reported that Apple paid $278 million in cash, citing an unnamed source.

• Web retailer Amazon.com said first-quarter profit rose 29 percent, helped by solid sales in the United States and abroad. Quarterly earnings climbed to $143 million (34 cents) per share, from $111 million (26 cents) a year ago. The results beat expectations. Revenue increased 37 percent to $4.14 billion.

Allstate Corp. said first-quarter profits fell a greater-than-expected 77 percent on claims from an unusual number of tornados as well as losses on its investments. The insurer said profits were $348 million (62 cents), down from $1.5 billion ($2.41 per share). Revenues were $8.1 billion, down from $9.3 billion.

Boeing Co. profit rose 38 percent in the first quarter, beating estimates, as the world’s No. 2 commercial planemaker boosted deliveries and orders. Profit from continuing operations rose to $1.21 billion ($1.61) from $873 million, ($1.12), a year earlier. Sales gained 4.1 percent to $16 billion. The 8.9 percent slump in the dollar this year has aided Boeing.

• The Securities and Exchange Commission, responding to the collapse of Bear Stearns Cos., said it might require Wall Street banks to keep more cash on hand during periods of market stress. The SEC is meeting with investment banks that have lost money on mortgage holdings to discuss raising capital, SEC Chairman Christopher Cox said.

Atlantic City, N.J., leaders have voted to ban smoking on the gambling floor of all casinos. The City Council voted unanimously to end the last major loophole in a statewide ban on smoking in public buildings. Gambling halls had previously been exempted. The ban takes effect Oct. 15. Casino workers attending the meeting wore T-shirts saying, “Nobody deserves to work in an ashtray.”

Starbucks Corp., the world’s biggest chain of coffee shops, forecast its first annual profit decline in eight years as sales at U.S. stores slowed. Profit in the year through September will probably trail the 87 cents a share the company posted last year, the Seattle-based company said.

• The brains and spinal cords from cattle at least 30 months old will be banned from all animal feed, including pet food, under a final U.S. rule aimed at curtailing mad cow disease. The rule, proposed in October 2005, takes effect in 12 months to give the livestock, meat, rendering and feed industries time to change their practices, the Food and Drug Administration said.


• A spinal column was found in a U.S. beef shipment in violation of a trade accord with Japan that prohibits parts thought to pose a risk of mad cow disease, Japanese officials said. A statement from two government ministries said Japan informed the U.S. Embassy of the findings and that shipments had been temporarily halted from the California plant involved.

• Shareholders at UBS approved a $15 billion capital increase at the Swiss bank that has been shaken by exposure to the U.S. subprime crisis, and replaced its top executive. Yet $37.4 billion in write-offs still stings for shareholders, a number of whom booed and hissed Peter Kurer, the former chief legal counsel named to replace Marcel Ospel as chairman of the board.

• Cigarette maker Philip Morris International, based in Lausanne, Switzerland, and spun off last month by longtime owner Altria Group of Richmond, reported a 29.2 percent rise in profit for the first quarter, beating estimates, and raised its outlook for the year. PMI said it earned $1.87 billion (89 cents), up from $1.445 billion (69 cents) a year ago.

From wire dispatches and staff reports

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