Other items: Boeing lets United cancel 777 order; Beijing sale follows earlier cancellation; Bid to acquire MCI to be raised again ...
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Western Wireless, which sells Cellular One-branded service in some U.S. states and in some other countries, said yesterday it was profitable last year.
The Bellevue company’s profit for 2004 was $232.9 million, or $2.27 a share, compared with a 2003 loss of $2.8 million, or 3 cents a share. Revenue for 2004 rose to $1.92 billion from $1.5 billion the previous year.
In the 2004 fourth quarter, the company had a profit of $124.9 million, compared with a year-ago loss of $1.13 million. The latest quarter’s results were bolstered by a tax benefit of $128 million, or $1.17 a share.
In January, Western Wireless agreed to be purchased by Alltel. The merger is pending Western Wireless shareholder and regulatory approval but is expected to close by the middle of this year.
Boeing lets United cancel 777 order
United Airlines said it reached an agreement with Boeing this month to cancel an order for a 777 jetliner, letting the carrier use “a significant portion” of a $45 million advance payment for other purposes.
The agreement is contingent on bankruptcy-court approval, United said in an annual filing yesterday with the Securities and Exchange Commission. The 777-200ER has a list price of $186 million.
United will apply $31 million of the advance payment toward future purchases of Boeing planes or services and will pay $14 million as a penalty, according to a court filing earlier this month. The aircraft order was part of an initial 1990 United agreement to buy 34 of the planes.
Beijing sale follows earlier cancellation
Microsoft said it sold software to the Beijing city government, after an earlier order was canceled following a complaint by a science-ministry official. The company didn’t give the value of the contract or other details.
Beijing’s government procurement office said in November that it canceled a $3.6 million order for Microsoft Windows and Office software after Li Wuqiang, director general of the Ministry of Science and Technology, criticized government agencies for buying software from overseas companies.
The most recent decision to buy Microsoft products is a boost for the Redmond company’s efforts to compete with government-backed local software makers and fight piracy.
Compiled from Seattle Times business staff and Bloomberg News
Bid to acquire MCI to be raised again
Qwest plans to sweeten its takeover offer for MCI for a third time to pressure MCI to scrap an agreement to be bought by Verizon.
Qwest will raise the offer by about 7 percent to $8.45 billion, people familiar with the matter said. Verizon Chief Executive Officer Ivan Seidenberg wrote to MCI’s board today, saying Qwest’s effort to buy MCI has a “desperate quality.”
MCI CEO Michael Capellas may use Qwest’s higher bid to extract a better offer from Verizon, which last month agreed to pay $6.75 billion. Qwest has pressed to get its bid in contention since MCI, the No. 2 long-distance company, accepted Verizon’s proposal. Holders of at least 26 percent of MCI stock said Verizon’s offer is too low and MCI’s biggest investor, Carlos Slim, said Qwest’s new terms won’t suffice.
Trade deficit reached all-time high in 2004
WASHINGTON — The U.S. deficit in the broadest measure of international trade surged to an all-time high last year, increasing a potential threat to the economy as the country sank deeper into debt to Japan, China and other nations.
The Commerce Department reported yesterday that the deficit in the U.S. current account increased by 25.5 percent last year to a record $665.9 billion.
The current-account deficit represents the total amount of financing the United States needs to cover its international accounts and thus covers all aspects of foreign trade, from goods and services to investment flows among countries.
So far, foreigners have been quite happy to sell to Americans cars, computers and clothing, and accept dollars in exchange. But analysts worry that foreigners will lose their appetite for dollars, which could lead to a rush for the exits, plunging the value of the dollar and stock prices while causing interest rates to soar.
Splitting of company into 2 being weighed
NEW YORK — Frustrated with a languishing stock price, media conglomerate Viacom announced yesterday that it is considering a plan to split into two companies to allow investors to value its businesses separately.
A breakup of the New York-based media company, whose properties include CBS, MTV, VH1 and the Paramount movie studio, would also solve the question of who would succeed Sumner Redstone as CEO.
Confirming a report on The Wall Street Journal’s Web site, Viacom said late yesterday it was exploring a plan that would split it into two separate entities: One anchored by its fast-growing cable networks such as MTV, led by longtime MTV chief Tom Freston; and another built around the broadcast television businesses that would be run by CBS head Les Moonves.
High-status retailer may put itself on sale
Capitalizing on a white-hot luxury market, Neiman Marcus — the department-store retailer whose name is synonymous with status shopping — said yesterday it may put itself up for sale.
Neiman Marcus said that it is “exploring various strategic alternatives to enhance shareholder value,” including selling itself, but that it might end up doing nothing.
The retailer’s stock jumped on the news, as investors considered the prospect of a bidding war for the company. Neiman Marcus’ Class A shares rose yesterday $11.29, or 15 percent, to $86.04; and Class B shares rose $12.60, or 17 percent, to $84.80 — both 52-week highs.
“Certainly Neiman’s is at the top of their game, and if ever there were a time to sell, this would be it,” said Allan Ellinger at MMG, a New York investment banking company that specializes in the apparel industry.
Spyware-removal firm shut by FCC
The Federal Trade Commission has temporarily shut down a Spokane company whose software purported to help people remove spyware, but that regulators claim often did nothing to stop the malicious programs.
A U.S. District Court judge in Spokane has approved a temporary restraining order against MaxTheater, which makes Spyware Assassin. In April, the FTC will ask a federal judge to make the ban permanent.
MaxTheater owner Thomas Delanoy, who is named in the complaint, told The Spokesman-Review he had been advised by his attorney not to comment.
Compiled from Bloomberg News and The Associated Press