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Business Today

By wire services
Published April 30, 2004

BB&T NAMES NEW COO: BB&T Corp. is elevating president and banking network manager Kelly King to the No. 2 post of COO effective June 30. King, 55, succeeds Henry Williamson, 56, who is retiring after 32 years with the North Carolina bank. Ricky Brown, 48, president of BB&T's Washington, D.C., community bank region, will succeed King as network chief on the executive management team. Based in Winston-Salem, N.C., BB&T recently closed on the acquisition of Republic Bank, the biggest bank with headquarters in St. Petersburg.

EDITOR NAMED FOR USA TODAY: USA Today named Kenneth Paulson editor Thursday. Paulson replaces Karen Jurgensen, who resigned last week before executives released a report that faulted management for not catching fraudulent stories filed by reporter Jack Kelley. Paulson was an editor and reporter for 18 years and held several senior editing positions within Gannett Co., USA Today's parent company. Most recently Paulson was executive director of the First Amendment Center, a part of Gannett's Freedom Forum.

VIATICAL BILL GOES TO BUSH: With no debate, the Florida House voted 111-1 Thursday to send Gov. Jeb Bush a bill to strip authority from two of the three regulators who oversee the controversial viaticals business. The provision, pushed by Mutual Benefits Corp. of Fort Lauderdale but opposed by competitors, would limit oversight to the state's insurance regulator. State CFO Tom Gallagher, who would lose oversight authority along with the state banking regulator, said he hasn't decided whether to ask Bush to veto the measure (SB 2994) because it also includes myriad other consumer protections he championed.

MORTGAGES TOP 6 PERCENT: Rates on 30-year mortgages climbed above 6 percent this week for the first time in 2004, reaching 6.01 percent for the sixth consecutive weekly increase since rates hit a low for the year of 5.38 percent the week of March 18, Freddie Mac reported Thursday. A nationwide survey showed that the increase, up from 5.94 percent last week, left 30-year mortgages at their highest level since Dec. 5.

INTERNET TAX BAN RESTORED: The Senate voted 93-3 Thursday to restore a ban on state and local taxation of the services that connect consumers to the Internet but to allow some states already collecting the levies to continue. Last fall the House voted to permanently ban taxes on Internet access, but the permanent ban couldn't win enough support to pass the Senate despite a strong push from the telecommunications industry.

NEW JOBLESS CLAIMS DROP AGAIN: The Labor Department reported that new filings for jobless benefits fell last week by 18,000 to 338,000. The cost of workers' wages and benefits grew by 1.1 percent in the first quarter, the biggest increase in a year, the department also said. The economy, after months of sluggish payroll gains, added 308,000 jobs in March, the most in four years. Still, analysts said it will take time for the economy to recoup the net 1.84-million jobs lost since Bush took office. Unemployment figures for April are expected to be released May 7.

BOOK SITE SETTLES SUIT: Barnes & Noble.com has reached an agreement with New York state authorities concerning an Internet security breach that exposed the personal information of some of the online book seller's customers. Under the terms of the agreement, Barnes & Noble.com will establish an information security program to protect personal information; establish management oversight and employee training programs; hire an external auditor to monitor compliance with the security program; and pay $60,000 in costs and penalties. The breach occurred sometime between 1998 and August 2002.

DISNEY DEBT RATING AFFIRMED: The Walt Disney Co., the second-largest U.S. media company, had its corporate credit and commercial paper ratings affirmed by Standard & Poor's one day after cable operator Comcast Corp. dropped an unsolicited bid for Disney. Disney has a BBB+ corporate credit rating and A-2 commercial paper rating on $13.1-billion of debt as of Dec. 31. Standard & Poor's said Disney's credit outlook is negative, reflecting challenges at some of Disney's businesses, a poor outlook for Disney's fiscal 2005 earnings, and concerns about Euro Disney SCA's liabilities.

ADELPHIA EX-EXEC ADMITS LIES: A key government witness in the fraud trial of former Adelphia Communications Corp. executives said he "lied again and again" about the finances of the company, often with the approval of some defendants. Former Adelphia vice president of finance James Brown, who has pleaded guilty in the case, testified Thursday that he and former CFO Timothy Rigas concocted various schemes to inflate operating earnings. Rigas is on trial on charges of conspiracy and fraud along with his brother, Michael; his father, John; and Michael Mulcahey, another former executive. They are accused of scheming to loot the company and mislead investors and the public about its finances and operations.

EARNINGS

Gateway Inc.: The struggling computer seller is cutting 1,500 more jobs, or about 40 percent of its remaining work force, only a month after a similar cut when it closed its retail stores. The announcement came as Gateway posted its 13th loss in 14 quarters. The jobs will be eliminated by year's end, CEO Wayne Inouye said. The layoffs will leave the company with about 2,000 employees, down from a peak of nearly 25,000 employees in 2000.

Dow Chemical Co.: The chemical giant plans to cut 3,000 jobs this year, a 6.5 percent cut in its global work force, and follows last year's cut of more than 3,500 jobs, company officials said Thursday. Dow, which has 46,000 employees, said it will make the cuts through reorganizations, attrition, shutdowns and divestitures. Dow posted a first-quarter profit that was six times higher than last year, saying improvements in price, volume and productivity outweighed nearly $100-million in energy and raw-material costs.

Aetna Inc.: The insurance company reported an 8 percent rise in profit for the first quarter Thursday as it unveiled a new benefits program for the terminally ill. Results topped Wall Street analysts' estimates by 3 cents.

DaimlerChrysler AG: The automaker said its first-quarter profit fell 33 percent, but earnings nearly doubled at Chrysler and the bulk of overhaul costs at its U.S. division were behind it. Also, CEO Juergen Schrempp won renewed backing from DaimlerChrysler's supervisory board after troubles at Japanese partner Mitsubishi Motors Corp. set back his vision of a global auto powerhouse. Figures are in euros.

AutoNation Inc.: The nation's largest car dealer said earnings plunged 53 percent in the first quarter from a year ago when results were boosted by a tax benefit. The Fort Lauderdale company raised its 2004 earnings estimates. Wall Street analysts had expected the company to report earnings of 30 cents a share.

UAL Corp.: United Airlines' parent company posted a net loss of $459-million for the first quarter - sharply improved from a year ago but reflecting continuing challenges as it targets emergence from Chapter 11 bankruptcy later this year.

Raytheon Co.: The defense contractor reported increased profits for the first quarter, though the company said pension costs were a significant drag on net income. Results beat analysts' estimates by 3 cents a share.

[Last modified April 30, 2004, 01:21:41]

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