Business today

MODEST INFLATION: The Consumer Price Index rose a modest 0.3 percent in March -- half the size of the 0.6 percent advance posted in February, the Labor Department reported. Rising energy costs drove the increase. Excluding energy and food prices, which can swing widely from month to month, the "core" rate of inflation was flat in March -- down from a tiny 0.1 percent rise the month before -- representing the best showing in four years.

HOUSING BOOM CONTINUES: Housing starts in March jumped 8.3 percent to a seasonally adjusted annual rate of 1.78-million, the Commerce Department said. Cheap financing and better weather contributed to the improvement.

STORES REINSTATE DIVIDEND: Federated Department Stores Inc., the parent of Macy's, Bloomingdale's and Burdines, will reinstate dividends after 15 years, paying 12.5 cents quarterly, and add $500-million to its share-repurchase plan. The dividend, the first since 1988, is payable July 1 to shareholders as of June 16, the company said in a statement. Federated estimated the dividend will cost $95-million a year.

STARBUCKS BUYS RIVAL: Starbucks Corp. is buying Seattle Coffee Co. for $72-million in cash, the companies said. The deal with Seattle Coffee's parent company, AFC Enterprises in Atlanta, includes Seattle Coffee's subsidiaries -- Seattle's Best Coffee with 129 stores and Torrefazione Italia, with 21 stores. The deal also gives Starbucks access to Seattle Coffee's wholesale contracts with about 12,000 grocery stores and food service accounts that distribute the company's coffee beans. Starbucks already has distribution agreements with 18,000 grocery stores and 5,600 food service accounts. Starbucks declined to disclose future plans.

MEDICARE FRAUD SETTLEMENT: Pharmaceutical companies Bayer AG and GlaxoSmithKline have agreed to pay multimillion-dollar settlements to resolve allegations they overcharged the government insurance program for the poor. Bayer will pay the government more than $250-million, and Glaxo will pay about $88-million for failing to give the Medicaid program the lowest price charged to any consumer, according to the agreement.

Z-TEL RECOVERS STATUS: Z-Tel Technologies Inc. of Tampa said Nasdaq has informed the phone company that its stock is back in compliance with the Nasdaq SmallCap Market's listing requirements and is no longer at risk of being delisted. Z-Tel received a warning from Nasdaq in February that the stock was subject to delisting because the company's market capitalization had fallen below the required $35-million. Z-Tel's market cap recovered after the company announced a stock repurchase plan last month. Z-Tel's stock closed Wednesday at $1.92, down 4 cents.

HEALTHY QUARTER: Raymond James Bank of St. Petersburg reported Wednesday that core net income rose 34 percent, from $853,465 to $1.14-million, in its second fiscal quarter. Assets rose 5 percent from a year ago to $886.9-million while loans rose 45 percent to $585.1-million. The bank is a subsidiary of Raymond James Financial.

MOTOROLA CUTS JOBS: Motorola Inc., the world's second-biggest mobile-telephone maker, will pare another 3,000 jobs this year to help counter sagging sales of equipment for cellular networks and cable television. The reductions, about 3.2 percent of the work force, will bring Motorola's job cuts to about 60,000 since mid 2000. The company will have 90,000 employees by year's end, chief financial officer David Devonshire said.

CAN THE SPAM: America Online has filed five federal lawsuits targeting spammers it accuses of sending some 1-billion junk e-mail messages promoting mortgages, steroids and pornography to its subscribers. The case resulted from about 8-million individual spam complaints from subscribers, most of whom used a "Report Spam" feature AOL introduced in the fall, the company said. The lawsuits, filed in the U.S. District Court in Alexandria, Va., are the first antispam cases AOL has launched since May 2001. They seek damages of more than $10-million plus an end to the messages.

BROKER BANNED: The National Association of Securities Dealers banned former broker Jacques Manlio Chrysoschoos of St. Petersburg from the securities industry. The association said he participated in outside business activities without notifying his then-employer, Shields & Co. Among the complaints was that he raised $1.3-million from investors in 2000 in private securities transactions. Chrysoschoos could not be reached for comment but consented to the findings without admitting or denying them.

MORE WORLDCOM CHARGES: The government filed new charges Wednesday against former WorldCom executive Scott Sullivan, accusing him of lying on financial statements to secure $4.25-billion in credit for the company. Sullivan was already charged with ordering WorldCom accountants to move operating expenses off the books, making the telecommunications giant appear profitable when it was losing money.

CRUISE TAKEOVER APPROVED: Shareholders of P&O Princess Cruises PLC approved the London company's $5.5-billion agreement to be acquired by Carnival Corp. of Miami in a deal that will create the largest cruise ship operator in the world. The vote -- the final hurdle in an 18-month takeover saga -- followed a similar meeting by Carnival shareholders. P&O and Carnival will operate as a dual-listed company. Its shares will trade on the London Stock Exchange as Carnival PLC, and on the New York Stock Exchange as Carnival Corp., with 13 brands in the United States, Europe and Australia.

AIRLINE BAILOUT: U.S. airlines will get the first $2.3-billion of new government aid by May 16 under a law enacted Wednesday, bringing cash assistance to airlines to $6.9-billion since the September 2001 terrorist attacks.

VISIT FLORIDA GETS CEO: Visit Florida, the state's tourism marketing agency, has chosen as its next president and chief executive Frank "Bud" Nocera, the group's executive vice president and chief operating officer since 1997. Nocera had been acting president since Austin Mott stepped down in December. His nomination is pending approval of the full board.

DIGITAL LIGHTWAVE LOAN: Digital Lightwave said it has secured a $10-million line of credit from Optel LLC, a company controlled by its majority stockholder and chairman, Bryan Zwan. The loan is secured by "substantially all" of Digital's assets. Optel has already loaned Digital about $2-million. Auditors for the ailing Clearwater tech company acknowledged there is "substantial doubt" about its ability to continue as a going concern amid heavy losses and demands of unpaid creditors. The company lost $38.8-million, or $1.24 per share, in the fourth quarter ended Dec. 31. Sales for the quarter fell 48 percent to $2.8-million from $5.4-million in the year-ago period.

Earnings

Wachovia Corp.: In the third day of reporting by major banks, strong retail operations continued to play a leading role in profitability in the January-March period.

The Charlotte, N.C., bank posted record earnings for the quarter ended March 31, with total revenue 3 percent higher than a year earlier.

Northwest Airlines: The St. Paul, Minn., company's losses more than doubled for the quarter ended March 31, and the chief executive says there are no signs business will improve soon.

Coca-Cola Co.: The Atlanta soft drink giant reports solid earnings for the quarter ended March 31, but its shares plunged on concerns about growth and growing anti-American sentiment cutting into business abroad.

SouthTrust Corp.: The Birmingham, Ala., bank reported a 9 percent increase in net income for its quarter ended March 31.

Media General Inc.: The owner of television stations and newspapers, including WFLA-Ch. 8 and the Tampa Tribune, said earnings in the quarter ended March 31 were boosted by the sale of its interest in Hoover's, while last year's quarter included a writeoff for accounting changes. Excluding such one-time charges, the Richmond, Va. company had first-quarter profit of $3.3-million or 14 cents a share compared to $6-million or 26 cents a share a year ago.

UnitedHealth Group Inc.: The Minnetonka, Minn., health insurer's profit for the quarter ended March 31 jumped 37 percent as the company gained customers and kept premiums rising ahead of costs.

Colonial BancGroup Inc.: The Montgomery, Ala., bank reported a 3 percent increase in net income for the quarter ended March 31.

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