Business todayBy Times staff writer
© St. Petersburg Times
published March 20, 2002
TOUGH QUARTER FOR JABIL: Jabil Circuit Inc. reported a 90 percent drop in earnings for the fiscal second quarter ended Feb. 28 due to sluggish market conditions, especially in the telecom and computing/storage sectors. The St. Petersburg electronics manufacturer said net income in the quarter was $3.7-million, or 2 cents a share, compared with $40.7-million, or 21 cents a share, a year earlier. Revenues were $822-million, compared with $1.2-billion for the second quarter of 2001. Jabil said it has signed new contracts with Compaq Computer Corp. and Alcatel and expects production levels to increase through the remainder of the year and into 2003, with growth in automotive, consumer, medical and networking sectors. Jabil reported its quarterly results after the market's close. Its shares closed at $20.76, down 34 cents.
TRADE DEFICIT WIDENS IN JANUARY: The U.S. trade deficit widened more than expected in January, as a return to economic expansion caused imports to surge. The $28.5-billion gap followed a $24.7-billion shortfall in December, the Commerce Department said. Analysts had expected a $27.1-billion deficit. Imports rose for only the second time since the recession began a year ago, led by increases for consumer goods, semiconductors, oil and machinery.
EMPIRE STATE BUILDING DEAL: An investor group that holds the lease on the Empire State Building has agreed to purchase the building from real estate magnate Donald Trump and his partner for $57.5-million. Empire State Building Associates, which is controlled by real estate investor Peter Malkin, will buy the 102-story landmark. The low sale price of the building, experts have said, is attributable to the long-term lease that generates relatively little revenue for the owner. Under the 114-year lease drawn up in 1961, the owner receives $1.97-million a year in rent, decreasing to $1.72-million a year until 2076.
DELTA OUTLOOK LOWERED: Delta Air Lines said it expects a first-quarter loss of $350-million to $380-million before costs because of lower demand after the Sept. 11 terrorist attacks. The loss estimate, equal to $2.85 to $3.10 a share, was worse than analysts' forecasts of a per-share loss of $2.64. Delta, the nation's third-largest carrier, posted a loss of $1.2-billion last year, including $734-million in the fourth quarter. Delta's stock price fell $1.18 to $34.08.
JETBLUE IPO TERMS SET: Underwriters for JetBlue Airways Corp. set the terms of the company's pending initial public offering at 5.5-million shares with a price range of $22 to $24 a share, according to a filing with the Securities and Exchange Commission. The IPO will constitute 13.6 percent of the 40.6-million shares outstanding, suggesting a total market capitalization of up to $973.9-million and total proceeds from the offering of up to $132-million. The company plans to list its common stock on the Nasdaq National Market under the trading symbol JBLU.
ACCENTURE TO SELL INVESTMENTS: Shares of Accenture Ltd. fell 12 percent after the consultant said it plans to almost double the amount of stock that can be traded and let insiders start selling some of their shares. The stock fell $3.42 to $26. Accenture sold 115-million shares in an initial sale last July, raising $1.67-billion. The pending sale may be worth as much as $2.99-billion based on Tuesday's closing price. Accenture also said it plans to sell some investments that have hurt earnings, and expects to record a charge of $212-million to cover the loss on the sale.
ALLTEL TO ADD WIRELESS UNIT: Alltel Corp. has agreed to buy CenturyTel's cellular business for $1.65-billion in cash. The deal involves more than 700,000 customers and will allow Alltel to expand into new markets in Arkansas, Louisiana, Michigan, Mississippi, Texas and Wisconsin. Also, Alltel said it won't pursue an offer to buy all of CenturyTel for at least a year. Alltel, which was spurned last year in its attempt to take over the company, said CenturyTel will drop a lawsuit related to the takeover bid. Alltel shares slipped $1.84 to $54.85. CenturyTel fell 48 cents to $33.55.
NEW PLAN FROM HUMANA: Humana Inc. is introducing a health benefit plan that puts more control, and possibly cost, in employees' hands. SmartSuite, which will be offered to companies with more than 300 employees, includes six plan options for workers to choose from. Among them are traditional HMO and PPOs, as well as more customized plans that feature a higher deductible in exchange for lower monthly premiums. One option covers the first $500 of benefits before the deductible takes effect. Like other managed care companies that are developing similar programs, Humana hopes the new design forces employees to become more aware of the true cost of health services. Humana has used SmartSuite for its 14,500 employees for the past year and said it has kept health care costs below the expected trend.
P&G RAISES FORECAST: Procter & Gamble Co. said third-quarter profit will rise at least 10 percent, more than forecast, because of higher sales of Tide detergent and the purchase of the Clairol hair-products business. P&G shares rose $2.28 to $89.94, the highest closing price in more than two years. Analysts had expected a profit of 81 cents in the quarter.
PROGRESSIVE TO SPLIT STOCK: Progressive Corp. said its board approved a 3-for-1 stock split to boost demand for its shares. The auto insurer said the split would be done through a stock dividend. The shares will be distributed April 22 to shareholders of record April 1. Progressive's shares rose $2.17 to $162.60.
NASD RULING: An arbitration panel for the National Association of Securities Dealers ordered a Fort Lauderdale broker to pay $3.4-million to 14 investors to whom he had sold promissory notes issued by First American Capital Trust of Clearwater. Clearwater lawyer Joel Goodman, who represented the investors, said broker Elliot S. Simon misrepresented the safety of the nine-month notes, which were backed by car loans. FACT owed investors $64-million when it filed for bankruptcy in 1999. The award included $1.6-million in punitive damages. The investors previously settled with Simon's former brokerage firm, H. Beck Inc. Simon could not be reached for comment.
HALLIBURTON TO SPLIT: Energy-services giant Halliburton Co. will break into two independent subsidiaries by midyear. In an e-mail message, chief executive David Lesar said the changes were designed to make it easier for investors to understand the company's business and to stop the slide in Halliburton stock because of asbestos liability. Under the plan, Halliburton's Energy Services Group, the part of the business that helps oil and gas companies, will split with Kellogg Brown & Root, an engineering and construction unit, with each becoming a wholly owned subsidiary. Halliburton shares rose 32 cents to $16.92.
APPAREL DEAL: Jones Apparel Group Inc. has agreed to acquire privately held Gloria Vanderbilt Apparel Corp. and Gloria Vanderbilt Trademark B.V. for $138-million. Jones Apparel, which generated revenue of more than $4.07-billion in 2001 from sales of Jones New York apparel, Nine West footwear and Polo Jeans, said Gloria Vanderbilt had sales of $146-million in 2001.
© 2006 • All Rights Reserved • Tampa Bay Times
490 First Avenue South St. Petersburg, FL 33701 727-893-8111
From the Times
From the AP