Business today

HILTON BAGS FORECASTS: Hilton Hotels Corp., the third-largest U.S. hotel company, cut its forecasts for first-quarter and 2003 profit, saying the Iraq war is reducing travel by businesses and consumers. Hilton expects to break even or earn 1 cent a share in the quarter ending next week. For the year, profit will be in the "high" 30-cent range.

CHARITABLE SCRUSHY: The suspended chairman and chief executive of HealthSouth Corp., Richard Scrushy, gave millions to a tax-exempt foundation he created at a time the government contends his company was overstating profits to boost his personal wealth. The government said it was trying to determine whether the money was booty from a massive accounting fraud. The Richard M. Scrushy Charitable Foundation Inc. listed almost $13-million in assets last year.

AMR STOCK TUMBLES: Shares of AMR Corp., owner of American Airlines, the world's biggest airline, tumbled 12 percent on reports that the carrier might seek bankruptcy protection as early as next week. AMR's stock has dropped 94 percent in the past 12 months, pushing the company's market value to $246.5-million from $3.43-billion at the start of 2002. American may seek bankruptcy protection by April 7, in part because of the war in Iraq.

DISTRIBUTOR FOUNDERS: Fleming Cos., the largest U.S. grocery distributor, said it may not be able to pay suppliers or make interest payments after lenders declined to extend more cash. Fleming lost a contract this month with Kmart Corp., its biggest customer. Fleming's shares and bonds tumbled in the past year because of concerns over disputes with suppliers and an SEC investigation into its accounting practices.

SRI SETTLES WITH SEC: SRI/Surgical Express Inc. said it has reached an agreement to settle a Securities and Exchange Commission investigation into its restated earnings for the third quarter of 2001. The Tampa company, which provides hospitals with surgical products, said it cooperated with the investigation. The SEC staff agreed to assess no penalties nor issue a finding of fraud against the company.

FOOD GIANTS SQUEEZED: ConAgra Foods' stock price dropped more than 8 percent Friday after a Wall Street Journal report said the company could be part of a federal investigation into an accounting scandal at a major food distributor. The report said other big food companies, including Sara Lee Corp., could be included in a federal investigation into Dutch supermarket distributor Royal Ahold NV's U.S. Foodservice division. ConAgra and Sara Lee denied any wrongdoing in statements Friday.

AP GETS NEW CHIEF: Tom Curley, president and publisher of USA Today, the largest newspaper in the United States, resigned to become chief executive officer of the Associated Press. Gannett Co., which owns USA Today, plans to name a replacement for Curley, 54, "shortly," Gannett CEO Doug McCorkindale said in a statement.

US AIRWAYS REVS UP: A federal bankruptcy judge gave his final approval Friday to US Airways' termination of its pilots' pension plan, clearing the way for the airline to emerge from bankruptcy protection next week. Airline spokesman Chris Chiames said the airline will work through the weekend to clear up technical matters so that it can emerge from bankruptcy protection Monday.

SEC LOSES ACCOUNTANT: The Securities and Exchange Commission's top accountant, Jackson Day, has resigned and plans to return to the private sector when a replacement is found. Day has been the SEC's acting chief accountant since November, when he replaced Robert Herdman, who stepped down amid controversy over his role in tapping former FBI and CIA director William Webster to head the new accounting oversight board.

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