By Compiled from Times wires
Published May 15, 2003
RETAIL RECEIPTS DROP: Consumers sent retail sales down 0.1 percent in April, fresh evidence that the end of the Iraq war has not produced a quick economic boost. The Commerce Department reported that consumers trimmed spending on clothing, furniture and building supplies. The drop was exaggerated by gasoline sales, which plunged 5.9 percent, reflecting lower prices. Excluding sales at gasoline stations, retail sales went up by a modest 0.4 percent in April. In March, consumers splurged and pushed sales up by 2.3 percent.
TECO GETS LOAN DEAL: TECO Energy Inc. of Tampa, which slashed its dividend last month to save cash, said lenders agreed to require less than expected in cash and collateral to back two power plants under construction. Representatives of some lenders for the plants being built in Arkansas and Arizona agreed to total security of about $172-million, TECO said. The company had estimated it would have to pay $200-million. Added payments of $62-million in collateral would be required if units of the plants did not come on line as planned this month.
LIBERTY BUYS SHARES: Liberty Media Corp., the investment company controlled by John Malone, said it intends to exercise rights to buy $838-million in stock in Barry Diller's USA Interactive, parent of Home Shopping Network of St. Petersburg. Regulatory filings by the companies suggested the purchases are intended to restore Liberty's 20 percent stake after dilution from USA's purchases of Expedia Inc. and Hotels.com. Meanwhile, Diller exercised options on 4.5-million shares of USA Interactive, netting him $126-million. He also donated 145,000 shares to a charitable group.
GATEWAY DISCLOSES PROBE: The Justice Department has opened an investigation of Gateway Inc.'s financial reports for 2000, dealing with the same questions raised in a continuing probe by the Securities and Exchange Commission, the company said Wednesday. The personal computer maker wouldn't discuss details of the investigation but said it was cooperating fully. The investigations were unlikely to have a "material adverse impact" on its financial position, cash flow or operating results, the company said.
CISCO SELECTS CFO: Cisco Systems Inc., the world's biggest maker of equipment to direct Internet traffic, said Dennis Powell has succeeded Larry Carter as chief financial officer. Carter, who is credited by shareholders with helping Cisco amass more than $20-billion in cash and investments with no debt, said in August he would retire this month after more than eight years as CFO. Powell, 55, was Carter's deputy.
DELTA PILOTS BALK: The Delta Air Lines pilots union is balking at a 22 percent wage-reduction proposal that is part of a companywide cost-cutting campaign. In a memo distributed to pilots Tuesday night, the union's economic and financial analysis committee said the nation's third-largest airline needs to cut costs to survive but noted employees have already made sacrifices. "Labor did not create this problem," the memo said.
2 QUIT AHOLD UNIT: Royal Ahold NV, the world's third-largest retailer, said chief financial officer Michael Resnick and executive vice president and general counsel David Abramson resigned from its U.S. Foodservice business following the ouster of the unit's chief executive Jim Miller. Ahold said last week the unit overstated profit by $880-million over three years. Ahold Tuesday pushed out Miller, hoping his ouster could restore investor confidence and stem a 40 percent decline in its share price.
PENNEY STOCK DOWNGRADED: Shares of J.C. Penney Co. fell 8.7 percent after a Goldman, Sachs & Co. analyst downgraded the stock a day after the company said first-quarter profit had declined 29 percent. The company's shares fell $1.63 to $17.22 by closing in New York Stock Exchange composite trading. They've fallen 25 percent this year. Goldman analyst George Strachan downgraded the shares to "underperform" from "in-line" after J.C. Penney said net income declined to $61-million from $86-million in the year-earlier period.
REPORT - HOUSING MARKET STRONG: There is no end in sight for the banner performance of the U.S. housing market, says the top executive at the nation's largest financier of home mortgages, Fannie Mae. Chairman and chief executive Franklin Raines told a Morgan Stanley Financial Services conference that although the rate of increase in home prices is declining, house prices continue to rise. He also expects 2003 to be the biggest year in history for refinancings and overall mortgage originations.
NEW JOURNAL PUBLISHER: The Tampa Bay Business Journal said Wednesday that publisher Forrest Gossett had "left the company." American City Business Journals, which runs the 41-paper chain, appointed Arthur Porter to replace him. Porter has served as publisher of the Dayton Business Journal in Ohio since August 2000. American City is owned by Advance Publications.
Earnings
Coast Dental Services Inc.
The Tampa dental practice management company said corporate expenses rose in the quarter ended March 30 in part because of $525,000 in costs related to the company's self-tender offer. Fifty-one shareholders tendered about 11,500 shares for $4.50 a share by the expiration date of April 14. About 2-million shares are outstanding. The company's majority shareholders intend to take the company private.
Federated Department Stores Inc.
The owner of the Burdines, Macy's and Lazarus chains said first-quarter profit plummeted 48 percent because sales dropped as consumers turned to discount retailers. Federated's sales have fallen in 11 of the past 12 quarters.
Tenet Healthcare Corp.
The U.S. hospital owner whose Medicare billing is being probed by regulators had a quarterly loss as government payments fell and it wrote down the value of some facilities. Chief executive Jeffrey Barbakow is cutting costs to save $100-million after abandoning a pricing strategy that had increased payments from the government for the sickest Medicare patients and padded Tenet's earnings.
