Pacific Northwest Starbucks said March sales at stores open at least a year increased 6 percent, the smallest gain in more than three years...
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Sales growth below analysts’ estimates
Starbucks said March sales at stores open at least a year increased 6 percent, the smallest gain in more than three years. The company cited fewer sales of coffeemakers.
Same-store sales at the largest U.S. coffee-shop chain were expected to increase 7.1 percent, the average estimate of seven analysts surveyed by Thomson Financial. Overall sales were up 22 percent to $599 million for the five weeks ended April 3.
The news, released after the stock market closed yesterday, pushed Starbucks stock down $1.02, or 2 percent, to $51.11 in after-hours trading.
Starbucks said the results included only 12 days of its annual sale of coffeemakers, compared with 23 days during the year-earlier period.
No delay on project, Army secretary says
The Army’s restructuring of its $125 billion Future Combat Systems (FCS) program will not delay the modernization effort led by Boeing or make it costlier, Army Secretary Francis Harvey said yesterday.
Harvey, speaking a day after the changes were announced, said he expected renegotiating Boeing’s contract will take three to four months. FCS is intended to use advanced communications to link troops with a family of 18 light, fast, manned and unmanned air and ground vehicles.
The Army decided to restructure the contract, ensuring tighter managerial oversight, after Sen. John McCain, R-Ariz., raised concerns.
Financial chief takes venture-capital job
Microsoft Chief Financial Officer John Connors left March 31 to join venture-capital firm Ignition Partners.
He announced his resignation Jan. 11 but didn’t give a specific date. The company provided the date in a filing with the Securities and Exchange Commission yesterday. Kent Hollenbeck, a spokesman for Microsoft, said the company has no update on a replacement.
Separately yesterday, Microsoft said Chris Early has joined its MSN Games division as studio manager. He replaces Don Ryan, who has moved to a new position as a general manager of Microsoft Games Studios. Early previously was chief operating officer of GameSpy.
Seattle company buys licensing firm
Corbis, a Seattle-based provider of archival, news and advertising images, said yesterday that it acquired Roger Richman Agency, a licensing agency representing deceased figures such as Albert Einstein, Sigmund Freud and the Marx Brothers.
Corbis said the acquisition would combine its existing historical archive images with the ability to secure the rights to license the persona of a dead celebrity.
Terms of the acquisition were not disclosed.
Compiled from Bloomberg News, Reuters and Seattle Times staff
Major shareholders criticize Verizon bid
Four major MCI shareholders criticized the company’s board yesterday for favoring a $7.5 billion takeover by Verizon over a high-priced offer from Qwest, raising the likelihood that the biggest telecom bidding war in six years will continue.
Like Qwest, the shareholders were mulling their next step, voicing frustration that MCI’s board has repeatedly chosen to leave money on the table by rejecting Qwest’s overtures.
John Paulson of Paulson & Co., a hedge fund that owns about 3.9 percent of MCI stock, said that if a vote were held today, he would favor Qwest. “I haven’t met one major shareholder that supports Verizon’s offer over Qwest’s offer,” he said.
Bill Miller, chief investment officer for Legg Mason Capital Management which has about 1.7 percent of MCI stock, called the MCI board “clearly mathematically challenged.”
“The MCI board seems to have mastered the Orwellian art of doublespeak by trying to convince the shareholders that less is really more,” Miller said.
Rival beats Boeing in deliveries, orders
Airbus delivered 87 commercial aircraft to customers during the first quarter, beating Boeing. It also came out ahead of its rival on new orders.
Airbus won signed contracts for 123 planes in the first three months, spokeswoman Barbara Kracht said. That compares with 44 for Boeing, which published the figures on its Web site Tuesday. Boeing delivered 70 planes in the period.
Textile firms seek cap on China goods
The U.S. textile industry yesterday petitioned the Bush administration to impose caps on imports of knit shirts, brassieres, pants and other clothing from China, saying a surge in those imports endangers their industry.
The petition affects products that accounted for $1.45 billion in imports last year, and follows by two days a decision by the U.S. Commerce Department to initiate investigations of three categories of Chinese apparel, including cotton trousers and underwear. The industry is using the cases to press China to voluntarily limit its exports to the United States, a spokesman said.
“More petitions will be filed in the weeks ahead,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “We will keep filing petitions until the United States and China reach a comprehensive agreement to moderate the growth of Chinese imports.”
The investigations could lead to caps on those imports. The U.S. industry is concerned that products from China will capture the entire $26 billion of imports in those categories, cutting out imports from Central America, Mexico and other nations. U.S. textile producers ship fabric to those countries to be sewed and shipped back to the U.S. duty free.
Restructuring lowers first-quarter earnings
Alcoa, one of the world’s top aluminum producers, said yesterday that first-quarter earnings fell year-over-year due to restructuring charges and other items, but profit from continuing operations narrowly beat Wall Street expectations.
Net income fell to $260 million, or 30 cents per share, from $355 million, or 41 cents per share, a year ago. Earnings from continuing operations totaled $273 million, or 31 cents per share, in the latest period.
Sales rose 13 percent to $6.29 billion from $5.59 billion a year ago, driven by higher primary metal and alumina prices as well as strength in the flat rolled products, extruded products and engineered services segments.
Shares of Alcoa, one of the 30 Dow industrials, were unchanged yesterday at $29.98, but rose 82 cents in after-hours trading.
Seeds business sprouts, profit grows
Agriculture biotechnology leader Monsanto said yesterday its second-quarter profit more than doubled, reflecting fewer restructuring charges and growth in its seeds business. The results surpassed Wall Street expectations.
The suburban St. Louis-based maker of Roundup herbicide and genetically modified seeds said net income jumped to $373 million, or $1.37 per share, in the three months ended Feb. 28. That compares with $154 million, or 57 cents per share, a year earlier.
Earnings from continuing operations were $371 million, or $1.36 per share, in the December-February quarter. The company said profits were lowered by about 2 cents per share because of restructuring charges, compared with year-ago charges of 12 cents per share.
Monsanto shares gained 77 cents yesterday to $61.75.
Customers sue auctioneer, PayPal
Eleven disgruntled customers have filed a class-action suit against online auctioneer eBay and its pay-system affiliate, PayPal, charging they schemed with an electronics merchant to encourage use of the payment system but frequently denied refunds when products weren’t delivered as promised.
The suit accuses eBay, PayPal and Essex Technology Group, a supplier of closeout electronics, of failing “to satisfy the quality standards” it advertised and said PayPal customers found they actually forfeited charge-back rights normally afforded by credit-card companies, despite promises in PayPal’s user agreement.
Amanda Pires, a PayPal spokeswoman, declined to comment on the litigation. But generally, she said, the company’s buyer-protection policy covers customers “no matter how you fund your purchase,” whether by credit card or bank account.
Calls to Essex were not returned.
German insurers queried in AIG probe
Representatives from Germany’s Munich Re, the world’s biggest reinsurer, are meeting with the New York Attorney General’s Office in connection with the investigation into insurer American International Group (AIG), a company spokeswoman said yesterday.
Attorney General Eliot Spitzer’s office is looking into allegations of widespread accounting irregularities at AIG, though Spitzer said Monday that he thought a resolution could be reached without criminal charges.
Munich Re had been asked to provide information at yesterday’s meeting, spokeswoman Anke Rosumek said. She wouldn’t comment further.
AIG’s new chief executive, Martin Sullivan, who took the top post March 14 after the board forced out longtime Chief Executive Maurice “Hank” Greenberg, has said that he is cooperating fully with regulators.
Compiled from The Associated Press, Bloomberg News and Los Angeles Times Washington Post News Service