Pacific Northwest ...
Health insurance to go on sale soon
Issaquah-based Costco is adding health insurance to its warehouse shelves.
In a pilot program to be launched next month in Southern California, Costco will offer family and individual coverage to its “executive” members through Calif.-based PacifiCare Health Systems, company officials said.
Officials would not quote premiums but said the insurance, a preferred-provider plan, would be 5 percent to 20 percent cheaper than policies that individuals could buy on their own.
Costco expects to offer coverage across California by the end of the year and may eventually make it available to regular members as well.
Company offers to buy back stock
Costco yesterday offered to buy back up to 1.33 million shares purchased on behalf of current and former employees’ 401(k) plans, according to filings.
The wholesale-club chain said the stock it purchased between Nov. 16, 2003, and Nov. 15, 2004, on behalf of those plans may not have been registered with the Securities and Exchange Commission “in a timely manner.” The company offered to buy back stock to reduce its potential liability.
Under the offer, employees who received stock in their 401(k) accounts through salary deferral, employer matching, rollover or after-tax contributions, will have their accounts credited with the amount paid for the stock, minus dividends, plus 8 percent interest per year they held the stock. The company said no change would occur to the 401(k) plan accounts of employees who reject the offer.
Firm ranks No. 1 in customer care
For the second year in a row, T-Mobile USA ranked highest in customer-care performance among the six largest cellphone companies, according to a J.D. Power & Associates study released yesterday.
The 2005 study evaluated care in three areas: on the phone or with an automated phone system, in a retail store or online. The Bellevue-based carrier scored particularly high for answering customer calls promptly and resolving issues or questions during the first phone call. It also ranked high for hold-time duration, coming in 34 percent below the average wait time of 3.44 minutes.
Modified EU version of Windows to ship
Microsoft said it will release a version of its Windows operating system next week that complies with a European Union antitrust order.
Windows XP Home Edition N and Windows XP Professional N, both of which exclude the company’s video and music player, will be sent to personal-computer makers in Europe on June 15. The two products will be available to retailers July 1.
Compiled from the Los Angeles Times, Seattle Times business staff and Bloomberg News
Stake in Vivendi sold for $3.4 billion
Barry Diller’s Internet conglomerate IAC/InterActiveCorp said yesterday it is selling its stake in Vivendi Universal Entertainment for $3.4 billion, ridding the billionaire investor’s company of a convoluted relationship as it gears up to enter the lucrative online search-engine market.
The deal turns over New York-based IAC’s 5.4 percent stake in Paris-based Vivendi to NBC Universal, which runs the television, theme parks and movie divisions owned by General Electric.
IAC and Vivendi also agreed to drop lawsuits that they had filed against each other in Delaware.
The truce ends an acrimonious alliance created when Diller — the former head of Paramount Pictures and the Fox television network — sold the USA network and other cable properties in 2002.
4th-quarter earnings rise; stock split OK’d
H&R Block, the nation’s largest income-tax preparer, said yesterday its fourth-quarter earnings increased 7 percent after a strong tax season, and that its board of directors has approved a two-for-one stock split.
But the Kansas City-based company said profits were down 10.5 percent for the year due to slower mortgage business and continued losses in its investment services division.
For the three months ending April 30, the company reported net income of $616.5 million, or $3.66 per share, compared to $576.9 million, or $3.24 per share, during the same period a year ago. Revenue was up 7.2 percent to $2.4 billion.
Analysts surveyed by Thomson Financial had expected earnings of $3.52 a share on revenue of $2.3 billion.
H&R Block shares closed down 28 cents at $50.65 yesterday, just prior to the earnings statement’s release.
Deadlocked jury given 4 days off
Deadlocked jurors began a four-day weekend yesterday afternoon after failing again to reach a verdict in the trial of HealthSouth founder and fired CEO Richard Scrushy, accused of leading a $2.7 billion earnings overstatement.
The jury, which has deliberated 12 days in Birmingham, Ala., but has been impaneled since Jan. 25, won’t return until Monday because at least two members had vacation trips that were paid in advance, court officials said.
Taking a break during deliberations in a major federal trial is unusual, but not unprecedented, said Joel Androphy, a lawyer who specializes in the field of corporate crime.
Scrushy is accused of orchestrating a huge fraud at the rehabilitation and medical-services chain over seven years beginning in 1996. The defense blames the fraud on Scrushy underlings, including 15 former HealthSouth executives who pleaded guilty.
Drug-study news boosts stock price
Shares of biotechnology company ImClone Systems soared yesterday after the company said a late-stage study showed its Erbitux drug is effective in preventing the spread of head and neck cancer.
Shares of ImClone rose $5.11, or 17 percent, to close at $35.27 yesterday, still near the low end of a 52-week range of $29.51 to $87.24.
Erbitux is the drug at the center of the scandal that led Martha Stewart and ImClone’s founder Sam Waksal to prison. Both Stewart and Waksal dumped ImClone shares in December 2001 before it became public that the FDA was rejecting the company’s application for Erbitux’s approval. The rejection sent ImClone shares into a tailspin.
Stewart, convicted for lying about the stock sale, left prison in March. Waksal pleaded guilty to insider-trading charges and remains incarcerated.
Bank of America
No verdict reached in ex-broker’s trial
The jury weighing charges against Theodore Sihpol III, a former Bank of America broker accused of late trading in mutual-fund shares, finished its fifth day of deliberations yesterday without coming to a verdict.
Sihpol’s trial in New York State Supreme Court is the first to arise from New York Attorney General Eliot Spitzer’s investigation of the mutual-fund industry. Spitzer contended that buying or selling after hours, known as late trading, was a crime because it diluted returns for fund members who weren’t granted the preferred treatment.
Sihpol, 37, is accused of helping a now-defunct hedge fund illegally trade late in mutual funds between 2001 and 2003.
Juror’s doctor visit delays deliberations
A juror’s visit to a doctor delayed deliberations for half a day in the trial of L. Dennis Kozlowski and Mark Swartz, former Tyco International executives accused of looting the company.
After they began meeting at midday, jurors sent a series of questions and requests to New York Justice Michael Obus of Supreme Court in Manhattan.
They wanted to see 43 exhibits, including 23 defense exhibits; a Tyco compensation committee packet; and two sets of its minutes. They asked for information on charges dealing with Kozlowski’s use of Tyco funds to buy art for his New York apartment, and about a description of the company’s relocation program the men are accused of falsifying. Obus told them he would address their questions this morning.
Kozlowski, 58, Tyco’s former chief executive, and Swartz, 44, who was his chief financial officer, are accused in a New York court of making $542.4 million by taking unauthorized bonuses, abusing company loan programs and selling Tyco stock after misrepresenting its financial condition to investors.
The jury of six men and six women has been considering fraud, larceny and other charges against the defendants since June 2.
Tracinda / GM
Kerkorian firm increases GM stake
Tracinda, the investment firm run by billionaire investor Kirk Kerkorian, said yesterday that it had boosted its stake in General Motors to 7.2 percent a day after GM unveiled a strategy aimed at reviving the world’s largest automaker’s profits.
Kerkorian’s Tracinda purchased 18.9 million shares at $31 apiece as part of a tender offer, fewer than the 28 million GM shares it had been seeking to purchase.
The purchase will boost Kerkorian’s stake in GM to 40.9 million shares, from 22 million shares, or 3.89 percent. He had hoped for an 8.84 percent stake.
GM shares closed yesterday at $32.02, up $1.29. The company said it had no immediate reaction to Kerkorian’s growing stake.
Dave Healy, a Burnham Securities analyst, had a simple explanation for why Kerkorian’s bid fell short: GM shareholders looking to sell in the past month likely did so on the open market, where the price rose above $31 a share, rather than accepting Kerkorian’s tender offer.
Compiled from The Associated Press and Bloomberg News