Business today

COMPAQ SHAREHOLDERS OKAY SALE: By a 9-1 ratio, Compaq Computer Corp. investors gave their approval for Hewlett-Packard Co.'s acquisition of their company, a day after HP claimed victory in its contentious shareholder vote. "It's the only combination in the industry that makes sense," chief executive Michael Capellas said at an investor meeting in Houston. Compaq shares fell 32 cents to $10.82. Shares of Hewlett-Packard fell 60 cents to $18.20.

SYKES DISCLOSES PAYMENTS: John Sykes, chief executive and chairman of Sykes Enterprises Inc. and its largest shareholder, received more than $1-million in side deals with the Tampa company in 2001. According to an annual report filed with the Securities and Exchange Commission, Sykes Enterprises paid about $800,000 for use of its founder's private airplane and roughly $500,000 to a company in which he has an 80 percent equity interest for help in deciding where to locate its U.S. call centers. Chief financial officer Mike Kipphut said the real estate consulting deal was canceled in July to reduce the company's side arrangements with its CEO. Sykes Enterprises' board also forgave a $400,000 note Sykes owed after concluding it was a corporate expense. Sykes' employment contract includes an annual base salary of $550,000 plus a performance-based bonus.

COURT OKAYS KMART AGREEMENTS: Kmart Corp. received bankruptcy court approval to continue its licensing agreements with its five major brands, including suppliers Martha Stewart Living Omnimedia and Disney Enterprises. James Adamson, Kmart chairman and chief executive, said getting the judge's approval was a key victory for the discount retailer in its restructuring efforts as it looks for ways to stand out from its competitors. Kmart filed for Chapter 11 bankruptcy protection Jan. 22.

TESTIMONY BLOCKED IN MICROSOFT CASE: The federal judge hearing the Microsoft antitrust case said particularly damaging testimony against the company is hearsay, and refused to consider it in deciding whether nine states can impose harsh penalties on the company. Judge Colleen Kollar-Kotelly said the written testimony from RealNetworks vice president David Richards could not be admitted because Richards did not have direct knowledge. Among many allegations, Richards said Microsoft had insisted that America Online drop RealNetworks' media software in favor of Microsoft's.

POSTAL SERVICE CRUNCH: Rising costs and slipping mail volume are giving the Postal Service an increasingly bleak financial outlook, according to a General Accounting Office report. The post office reported a $1.68-billion loss last year, the report said, and costs are increasing faster than income. In addition, dealing with the terror attacks and the anthrax mailings have cost the agency millions of dollars, as will continuing efforts to protect the mail. The Postal Service is seeking a 3-cent rate increase for first-class letters, to 37 cents, which could take effect in June and help ease some of the anticipated losses. It is also asking Congress to give it more operating flexibility.

CHECKERS SORTS OUT RESTAURANTS: Checkers Drive-In Restaurants Inc. of Tampa said 14 restaurants previously owned by franchisee Great Lakes Restaurant Co. LLC of Ohio will be closed. After Great Lakes filed for bankruptcy in January 2001, a receiver took over its 39 locations. Now, 16 are being acquired by other franchisees, and nine by Checkers. All 14 of the stores being closed are in Detroit. Great Lakes purchased 36 Rally's restaurants and six Checkers restaurants from the Tampa company for $15.6-million in 1999.

MEDIA GENERAL RAISES OUTLOOK: Media General Inc., owner of the Tampa Tribune and WFLA-Ch. 8, doubled profit estimates for the first quarter as broadcast revenue rose in February. Media General said it expects to earn about 20 cents a share, up from a forecast of 10 cents. In particular, the company reported higher revenue from its broadcast and interactive media divisions. Analysts expected the Richmond, Va., company to earn 8 cents a share. Shares of Media General rose 39 cents to $58.60.

AOL-NEXTEL DEAL: AOL Time Warner Inc. said it will put America Online services such as e-mail, instant messaging and news on Nextel Communications Inc. mobile phones. Terms of the agreement were not disclosed. The services should be available on Nextel phones later this year, an America Online spokesman said. Wireless companies such as Nextel are trying to increase the amount of time customers spend on their phones, while AOL is seeking ways to get subscribers to spend time online when they're away from their personal computers.

Earnings

FedEx Corp.

Net income rose 11 percent for the fiscal quarter ended Feb. 28, as the Memphis, Tenn., delivery company reported increased business in its FedEx Ground division.

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