- The Washington Times - Tuesday, April 29, 2008

Regional

• Regulatory filings indicate a proxy battle between an activist shareholder and Richmond electronics retailer Circuit City is imminent. Wattles Capital Management filed a preliminary proxy statement with the Security and Exchange Commission asking shareholders to elect four new directors to the board and oust the others. Mark J. Wattles criticizes the company’s turnaround efforts, placing blame on Chief Executive Philip Schoonover.

Carlyle Group Chairman David Rubenstein said private equity firms are looking at buying financial-services companies and the assets they want to get off their books. “In the United States right now, the single-greatest investment opportunities are financial institutions and financial assets,” Mr. Rubenstein said in a speech in Baltimore.

National

Verizon Communications Inc. reported steady earnings in a stormy economy. The country’s second-largest telecommunications company said first-quarter earnings rose 9.8 percent as its wireless division signed up more new customers than rival carriers did. Net income was $1.64 billion (57 cents per share) in the quarter that ended March 31, compared with $1.5 billion (51 cents) a year ago. Revenue rose 5.5 percent to $23.8 billion.

American Airlines‘ turnaround, propped up by union concessions in 2003, is running out of steam, industry observers said. The airline’s parent, AMR Corp., could have to declare bankruptcy sometime next year, the Fort Worth Star-Telegram reported. Union officials said the airline’s second brush with financial insolvency will not likely be met with the same willingness to accept concessions as the first time around.

Virgin Atlantic Airways announced a special one-way fare to London for passengers who were booked on EOS Airlines, which has ceased operations. EOS passengers, with proof of future travel on EOS, can fly Virgin Atlantic from Boston Logan International Airport, Washington Dulles International Airport, Newark International Airport and John F. Kennedy International Airport directly to London Heathrow.

Delta Air Lines Inc., the third-largest U.S. carrier, added as much as $40 to some round-trip domestic ticket prices to help cover rising fuel costs. Delta, based in Atlanta, increased a fuel surcharge added to tickets by $10 to $40 round trip, depending on the type of airfare. The increase brings the fuel charge on some tickets to $110 round trip. The price of jet fuel has climbed 66 percent during the past year.

American Airlines became the latest carrier to announce that it would require passengers to pack light, or pay up. The nation’s biggest airline said it must charge passengers $25 for checking a second bag to help offset rising fuel costs. The fee will apply to travelers who buy domestic economy-class tickets on or after May 12, American said. It will also affect passengers on the American Eagle commuter line.

Bank of America said it will expand efforts to help Countrywide Financial borrowers avoid foreclosure on trouble mortgages. The statement came as members of the Federal Reserve Board began two days of public hearings on Bank of America’s proposed $4.1 billion stock deal for Countrywide. Bank of America said it will modify at least $40 billion in problem loans from at least 150,000 borrowers over the next two years.

• More than a half-million U.S. households got mortgage assistance in the first three months of this year, though most of the help was temporary, a mortgage industry group said. Statistics released by Hope Now, a Bush administration-organized effort to help at-risk borrowers, show that nearly 503,000 borrowers received some form of loan workout in the first quarter.

Sovereign wealth funds have mushroomed 24 percent over three years to hold a total of $3.5 trillion dollars last year, economics firm Global Insight said. The firm projected that at such a rate, sovereign wealth funds would surpass the entire current economic output of the United States by 2015, and the European Union by 2016. Emerging economies are flush with government reserves from higher energy and commodities prices.

• A federal judge has ruled that Mattel Inc. can proceed to trial with claims that a former employee breached his agreement while employed by the company by doing work for rival MGA Entertainment that led to the successful line of Bratz dolls. U.S. District Judge Stephen Larson said that Mattel could claim rights to work done by then-employee Carter Bryant. Sales of Bratz dolls are eating into Mattel’s Barbie doll franchise.

General Motors Corp. said it will cut one shift at four North American factories that make pickup trucks and big sport utility vehicles, resulting in some layoffs. The world’s largest automaker said the cuts are due to sagging sales, brought on by high gasoline prices and a housing industry downturn. GM said the cuts will affect pickup factories in Pontiac and Flint, Mich., and Oshawa, Ontario, as well as the full-size SUV plant in Janesville, Wis.

Thornburg Mortgage Inc., the New Mexico home lender that came close to filing for bankruptcy, said the Securities and Exchange Commission is investigating a restatement for fiscal 2007. The agency is also looking at margin calls received by the lender and accounting contained in the restatement, Thornburg said in a regulatory filing.

• Two former employees of KBR Inc., the largest contractor in Iraq, said the company overcharged the government for services to U.S. troops. The two told a meeting of Senate Democrats that KBR inflated bills by exaggerating the number of U.S. troops using recreation centers, overcharging for laundry services and assigning more staff than needed to facilities.

International

• Europe is suffering from “a very strong inflationary shock” on soaring food and energy prices, according to the European Union. The EU now predicts that inflation in the euro economy will rise more than a full point to an average 3.2 percent this year, from 2.1 percent last year, far more than the European Central Bank’s recommended guideline of just under 2 percent.

PetroChina Ltd., China’s biggest oil company, said profit plunged 31.5 percent to $4.1 billion in the three months ended March 31 and it cited government controls that bar it from passing on record crude costs to consumers.

Venezuela is selling $4 billion in bonds as part of an effort to slow inflation and strengthen its currency. The government offered $1 billion more than initially planned in the dollar-denominated bonds because demand was strong. The bonds are attractive to companies seeking to skirt Venezuela’s currency exchange controls to obtain hard currency needed for imports.

Venezuela eliminated price controls on eggs and increased the regulated price for chicken and corn flour in a bid to encourage production and relieve shortages. The regulated price for chicken was raised 84 percent and the price for corn flour was raised 48 percent, according to the resolution published in the government’s Official Gazette. Corn flour is used to make a corn patty called an arepa, a staple of the Venezuelan diet.

From wire dispatches and staff reports


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