- The Washington Times - Friday, April 25, 2008

Regional

U Media General Inc. of Richmond said a preliminary count shows its shareholders have elected three new board members nominated by hedge fund Harbinger Capital Partners seeking changes at the media company. The newspaper publisher and television station operator had opposed the nominees and questioned the nominees’ experience and the investment group’s long-term plan to improve profitability.

U Federal prosecutors say a Virginia railroad owner involved in a deadly collision and chemical spill in South Carolina violated the Clean Water Act. Prosecutors argue in court documents that Norfolk Southern should be fined for discharging chlorine and diesel fuel into waterways near Graniteville after the 2005 crash. Nine people died and thousands were evacuated as a result of the crash.

U A jury cleared two former executives at AOL and defunct Las Vegas software company PurchasePro of civil fraud charges brought by federal regulators who accused the executives of concocting sham financial transactions back in 2001. A third defendant was found liable on one count and cleared on three others.

U Altria Group Inc. of Richmond said first quarter profit dropped 11 percent on charges and a decline in sales of cigarette and other tobacco products. The cigarette maker said net income fell to $2.45 billion ($1.16 per share) from $2.75 billion ($1.30) a year ago. Net income was 37 cents per share excluding one-time charges and results from its recently spun-off international division, matching estimates.

U Altria Group’s former chief executive, Louis Camilleri, received compensation last year valued by the company at $24 million as he engineered the breakup of the world’s largest traded tobacco company. Mr. Camilleri, 53, received a salary of $1.75 million, and $4.75 million through the annual incentive plan. Other compensation includes stock grants that may have been awarded in previous years and expensed last year.

National

U United Airlines, the second-largest U.S. carrier, raised nearly all its domestic airfares by 3 to 5 percent as it struggles to cope with soaring fuel costs. The widespread increase is the third in a row initiated by United in just over two weeks, and will likely entice other carriers to follow suit. The Chicago-based carrier’s last two attempts were quickly matched by competitors and remain in place in many markets.

U A former Schottenfeld Group trader will pay $156,000 to settle claims he spread false rumors about Blackstone Group’s bid for Alliance Data Systems Corp., in the first U.S. regulatory case to target stock manipulation during the credit crisis. Paul Berliner, 32, sought to profit by messaging traders at brokerages and hedge funds on Nov. 29, claiming Alliance Data’s board was meeting to discuss a reduced offer by Blackstone, the Securities and Exchange Commission said.

U Bond insurers, including those owned by Ambac Financial and MBIA, might need to raise additional capital, said New York Insurance Department Superintendent Eric Dinallo. “It’s not time for a victory lap,” Mr. Dinallo said. “Mortgage losses and defaults will drive whether capital is ultimately OK.” The insurers need to provide as much detail about what they have guaranteed as possible to restore confidence, Mr. Dinallo said.

U Struggling cell phone maker Motorola Inc. disappointed investors when it posted a wider first-quarter loss and failed to meet revenue forecasts. Motorola said it lost $194 million (9 cents) for the quarter that ended March 31, 7 percent more than a year earlier when it lost $181 million (8 cents). Excluding one-time charges related to massive job cuts, the company would have lost 5 cents per share. Sales fell 21 percent to $7.45 billion.

U Microsoft Corp. said its fiscal third-quarter profit fell 11 percent from a year earlier, when revenue from pre-sales of the new Windows Vista operating system pushed up results. Net profit for the three months ended March 31 fell to $4.39 billion (47 cents) from $4.93 billion (50 cents) a year ago. Earnings were depressed by 15 cents per share because of a fine from the European Commission. Revenue edged up to $14.45 billion from $14.4 billion.

U The Federal Reserve has auctioned $59.46 billion in super-safe Treasury securities to big investment firms, part of an ongoing effort to help strained credit markets. The auction — the fifth of its kind — was held yesterday and fetched bids totaling $59.46 billion. That was less than the $75 billion worth of securities the Fed was making available. That could suggest some improvement in credit conditions.

U Rates on 30-year mortgages topped 6 percent for the first time in six weeks as financial markets grew more worried about rising inflation pressures. Freddie Mac, the mortgage company, reported that 30-year fixed-rate mortgages averaged 6.03 percent this week after three straight weeks at 5.88 percent.

International

U Japan will not impose a blanket ban on U.S. beef imports, despite the discovery of a spinal column in a meat shipment from an American processing plant, a government spokesman said. Japan this week temporarily halted beef shipments from a U.S. plant after finding the spinal column. But Chief Cabinet Secretary Nobutaka Machimura said the violation was apparently an isolated case.

U China’s stocks surged, sending the Shanghai Composite Index to its biggest gain in more than six years, after the government cut the tax on equity trading to stem a slump that erased $1.7 trillion of market value. The Shanghai measure rose 9.3 percent, the most since Oct. 23, 2001, with more than half its members climbing by the daily limit. The government stepped in after the index sank to less than 50 percent of its October record amid concern earnings growth will slow.

U The International Monetary Fund said it is in talks to provide extra financing to 10 developing countries struggling to cope with the soaring cost of food, a spokesman for the Washington-based lender said. Mali, Cameroon and Madagascar are among the countries in advanced talks with the fund. The money would come from the fund’s Poverty Reduction and Growth Facility — a lending arm with a 0.5 percent interest rate established in 1999.

U Brazil’s government is backing legislation to significantly boost the stake foreigners can hold in domestic airlines, the defense minister said. Nelson Jobim, whose ministry oversees civil aviation, said raising the limit on foreign ownership to 49 percent from 20 percent would increase competition and draw investment to help ease an air traffic crunch. “We have demand way above our capacity” because of Brazil’s booming economy, Mr. Jobim said.

U Nicaragua is tightening control of bean exports to neighboring Central American nations to ensure that domestic demand is met and to prevent black market trade, local media reported. The government has blocked 74 containers filled with beans at customs posts on the borders with El Salvador and Costa Rica, an export official said.

From wire dispatches and staff reports

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