Business Desk
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
PUBLISHING
PARSONS: AOL TURNAROUND WOULD BETTER SERVE TIME WARNER
Turning around America Online will do more for parent Time Warner’s stock than the steps sought by investor Carl Icahn, Chief Executive Officer Richard Parsons said.
Time Warner, the world’s largest publishing and broadcast company, is exploring “structural and strategic” changes to boost sales at its AOL Internet unit, Mr. Parsons said yesterday at Goldman Sachs Group’s Communacopia conference in New York. Mr. Parsons, 57, is under pressure from Mr. Icahn, who has demanded the New York-based company buy back $20 billion of its shares and spin off its cable-TV unit to lift the stock price. Mr. Parson’s comments were his first public remarks since Mr. Icahn made the demands last month. Microsoft is in talks to invest in AOL, a person familiar with the matter said last week. Mr. Parsons declined yesterday to comment on that issue.
– Bloomberg News
MURDOCH SAYS NEWS HAS COMPLETED 20% OF SHARE BUYBACKS
The chairman of News Corporation, Rupert Murdoch, said the publishing and broadcast conglomerate’s no. 1 priority is to boost shareholder value.
In three months, the company has spent 20% of the $3 billion it has allocated for share repurchases and should complete the remainder well within the two-year period originally outlined, Mr. Murdoch told investors at a Goldman Sachs conference in Manhattan, which was broadcast over the Web. “Then we will look at it again.”
Operationally, Mr. Murdoch said he sees the Internet as a big priority and a significant driver for the company, which has made a string of Internet acquisitions in recent months, has yet to determine whether it will form partnerships with other companies or make acquisitions to obtain so-called voice over Internet Protocol, or VOIP, and search engine capabilities. He added that he expects to have both capabilities “within weeks.”
– Dow Jones Newswires
ENERGY
AHEAD OF HURRICANE RITA, OIL COMPANIES CLOSE REFINERIES
Oil companies began closing Texas refineries yesterday, threatening the supply of gasoline to the nation’s pumps as Hurricane Rita grew more violent and took aim at a stretch of Gulf coast that holds one-fourth of the nation’s oil-refining capacity.
Experts say the refineries, nestled in a 300-mile swath from the Louisiana border to Corpus Christi, would recover within a couple days from a glancing blow. But if Rita swamps Houston as Hurricane Katrina did to a three-state area along the Gulf of Mexico last month, they warn, the storm will take more dollars from motorists’ wallets and add to the problems of the nation’s airlines.
BP PLC began closing its massive Texas City refinery yesterday. Marathon Oil and Shell Oil did the same at their refineries near Houston. Shell’s refinery kept running through the last major Texas hurricane, Alicia in 1983. Meanwhile in the Gulf of Mexico, Rita began to take a toll on oil production, which hadn’t yet fully recovered from last month’s Hurricane Katrina.
Crude-oil prices rose yesterday as traders braced for the possibility that Hurricane Rita could smash into key oil facilities in Texas.
– Associated Press
FINANCIAL SERVICES
MORGAN STANLEY REPORTS QUARTERLY LOSS
Morgan Stanley became the first Wall Street firm to report lower third-quarter earnings, dragged down by $1 billion in costs for the planned sale of an aircraft-leasing unit.
Net income declined 83% to $144 million, or 13 cents a share, in the three months ended August 31 from $837 million, or 76 cents, a year earlier, the New York-based firm said yesterday. Excluding expenses from the sale, Morgan Stanley earned $1.2 billion, or $1.09 a share, exceeding analysts’ estimates of $1.05 a share. Morgan Stanley Chief Executive John Mack said in a statement that “we still have a great deal of work to do,” after reporting the write-down and setting aside $178 million to overhaul management following the ouster of his predecessor, Philip Purcell. Revenue rose 29%, led by fixed-income sales and trading. The gains were smaller than at Goldman Sachs Group and Lehman Brothers Holdings.
– Bloomberg News
AIRLINES
NORTHWEST TO LAY OFF 1,400 FLIGHT ATTENDANTS
Northwest Airlines informed its flight attendants through a memorandum that 1,400 of them will be laid off by the end of the year. The carrier, which filed for bankruptcy-court protection last week, will begin with 900 furloughs on October 31, including 480 in Detroit, Northwest’s largest hub, and 355 in Minneapolis.
– Dow Jones Newswires
IN BRIEF
The board of the New York Mercantile Exchange, the world’s largest energy market, approved a plan to sell a 10% stake to buyout firm General Atlantic for $135 million, rejecting a rival bid from the Blackstone Group … Billionaire investor Kirk Kerkorian’s Tracinda Corporation, the third-largest investor in General Motors, said it may ask for representation on the automaker’s board … FedEx said its first-quarter profits rose and earnings for the full year will be higher than forecast because of growing exports from Asia … Starbucks declared a 2-for-1 stock split payable October 21, the fifth 2-for-1 split since the company’s IPO in 1992 … Mc-Donald’s said it plans a partial spinoff of its Chipotle Mexican Grill chain with an initial public offering, probably in the first quarter of 2006.
– Bloomberg News and Dow Jones Newswires