Here is a look at more of Thursday's top business stories:
Earnings decline at Goodyear Tire
AKRON, Ohio, Oct. 25 (UPI) -- Goodyear Tire & Rubber Co. said its third quarter net income fell to $9.3 million, or 6 cents a share, from $17 million, or 11 cents a share during the same period last year.
The tire maker noted last years results included a one-time gain of $2 million, or 1 cent a share.
Analysts on Wall Street had expected the company to post a net income of 5 cents a share, according to Thomson Financial/First Call.
Goodyear said on Sept. 26 that it expected earnings of 5 cents a share, the same as in the second quarter.
Sales improved to $3.7 billion from $3.6 billion. Tire unit volume decline 0.5 percent to 56.7 million units.
The company said the third quarter results reflect continued weak economic conditions and market deterioration in much of the world and an abrupt decline in sales in September.
"Because of a general economic slowdown, market conditions were tough in many regions during the quarter," said Sam G. Gibara, chairman and chief executive officer.
"In September, industry volumes in our key markets were off markedly," he said.
"However, in the important North America consumer replacement tire market, Goodyear outperformed the industry, ending the quarter with a three percentage point gain in market share," Gibara said.
In response to these difficult economic and industry-wide conditions, Goodyear cut back production significantly, reduced inventory, pursued an aggressive cost reduction program, curtailed discretionary expenditures and implemented initiatives to increase sales revenue and margins.
"Despite the challenges presented us, Goodyear has made significant gains in market share, increased prices, reduced inventory levels without sacrificing customer service and stepped up its global rationalization and cost reduction programs," Gibara added.
American International posts lower results
NEW YORK, Oct. 25 (UPI) -- American International Group Inc., the world's largest insurer by market value, said its third quarter net income plunged 81 percent as it set aside money to pay heavy claims from the destruction of the World Trade Center and took a big charge for the acquisition of life insurer American General Corp.
American International Group said it faces $820 million in claims from the Sept. 11 attacks, slightly more than it estimated earlier this month.
"While it is impossible for any company to forecast these losses with precision, this is our best estimate," said Chairman Maurice Greenberg.
American International said it took a charge of $1.36 billion in the third quarter for reorganizing as it integrates American General, which it bought earlier this year.
The company warned of the charge, which covers the cost of shutting down some operations, compensation and severance fees plus banker and lawyer fees, earlier this month.
Including the World Trade Center losses, the merger charge, and realized gains from selling investments, the company said its third quarter net income fell to $326.8 million, or 12 cents a share, from $1.7 billion, or 65 cents a share during the same period last year.
The year-ago results were adjusted to include the operations of American General.
American International said third-quarter core income, excluding the Sept. 11 losses, the merger charge, realized gains and other one-time items, rose to $1.9 billion, or 72 cents a share, from $1.7 billion, or 63 cents a share last year.
Core income is a new way of measuring earnings for AIG, which usually includes the cost of all claims in its adjusted, or operating, earnings, while excluding realized investments.
Including the World Trade Center claims -- equal to about 17 cents per share after taxes -- American International had operating income of 55 cents a share in the quarter.
Analysts on Wall Street had expected American International to post an operating income of 54 cents a share, according to Thomson Financial/First Call.
American International said its revenues, boosted by the addition of American General and rising insurance prices, rose 13 percent to $15.7 billion.
Greenberg said, "The Sept. 11 terrorist attacks were a tragic and wanton loss of life and destruction of property. AIG lost two of its employees in the World Trade Center, and 24 family members of AIG people perished. Many well-respected insurance industry colleagues and friends also lost their lives, as well as the heroes in uniform who rushed to the scene to offer their help without regard to their own personal safety. While this human tragedy is irreparable, Americans and freedom loving people around the world are united against terrorism. There is no question of our ability to overcome this evil.
"In the face of this tragedy, I have never been more proud of our people. The men and women of AIG effectively safeguarded their colleagues and met the most pressing demands of our customers. I am deeply appreciative of their efforts. Because of them, we are moving forward as an even stronger and more united organization and well-equipped to meet the challenges ahead," he added.
Earnings fall at WorldCom
CLINTON, Miss., Oct. 25 (UPI) -- Long-distance telephone and data services company WorldCom Inc. said its third quarter net income fell 60 percent on a consolidated basis to $536 million from $1.36 billion a year ago.
Revenues of $9.0 billion were flat compared with a year ago. The results exclude its investment in Brazilian carrier Embratel.
Earlier this year, WorldCom Inc. restructured and created two tracking stocks. The WorldCom Group stock tracks the faster-growing data and corporate telephone business and international businesses. The MCI Group stock follows the stagnant, long-distance telephone operations and dial-up Internet business.
Third-quarter net income for the WorldCom Group fell 41 percent to $460 million, or 16 cents a share, from $780 million, or 27 cents a share during the same period last year.
Analysts on Wall Street had expected WorldCom to post a net income of 16 cents a share, according to Thomson Financial/First Call.
In July, WorldCom Group cut its 2001 profit outlook due to a change in accounting of its Embratel investment and its purchase of Intermedia Communications Inc.
Revenues for the WorldCom Group rose 12 percent to $5.5 billion. The increase was driven by a 22 percent jump in sales of data and Internet services, which now comprise 56 percent of the group's revenues, the company said.
Sales of voice telephone service to businesses dropped 6 percent and represented 30 percent of WorldCom Group's revenues.
The company said business long-distance voice revenues declined at a slower pace than in previous quarters, but wireless sales weakened compared with the second quarter.
The MCI Group's third quarter net income plunged 94 percent to $33 million, or 28 cents a share, from $560 million, or $4.87 a share a year ago.
MCI Group's revenues dropped to $3.5 billion from $4.2 billion a year ago.
Revenues fell $64 million from the second quarter due to a decrease in sales of wholesale and dial-up Internet services. The company said it saw strong growth in sales of consumer local phone service, and steady long distance results.
MCI Group will have declining, but stabilizing sequential revenues and will generate sufficient cash to pay its $2.40 annual dividend and allocated debt, the company said.
"WorldCom delivered excellent growth this quarter, while substantially improving the free cash flow of our businesses," said Bernard J. Ebbers, president and chief executive officer of WorldCom Inc.
"Our data, Internet and international businesses continue to perform well in spite of the very difficult economic environment. We still expect our growth businesses to gain market share profitably during this period of global economic uncertainty," Ebbers said.
Oneida cuts staff, issues earnings warning
ONEIDA, N.Y., Oct. 24 (UPI) -- Flatware and cutlery maker Oneida Ltd. said it has cut more than 100 non-manufacturing positions at several company locations and also expects its fiscal third quarter earnings will fall below estimates.
The company, which announced 65 job cuts at its Sherrill, N.Y., facility earlier this month, said it also cut 35 non-manufacturing jobs at other locations, including its factory in Buffalo, N.Y. The company employs about 4,300 people worldwide.
Oneida said it expects profits for the period ending Oct. 27 to be in a range of 1 cent a share to 3 cents a share, with net revenues of about $125 million.
The company said the third quarter results will be lower than anticipated due to continued softness in product demand within U.S. markets, stemming largely from the impact of the Sept. 11 terrorist attacks.
"In the aftermath of the September 11 tragedy, our Foodservice unit in particular experienced a significant decline in orders from the airline, restaurant and hotel industries due to the sharp reduction in travel," said Peter J. Kallet, chairman and chief executive officer.
"In addition, our consumer unit was affected by the drop off in traffic at retail stores. While we do not believe that these effects will be long-term, they have been a major factor in the currently challenging business conditions that we face," he said.
Kallet said, "Our cost-reduction efforts also included the recent elimination of more than 100 non-manufacturing positions at several company locations. In addition, we lowered the manufacturing rates at our factories in Sherrill, N.Y., and Buffalo, N.Y., through temporary reductions in work hours.
"These cost-reduction measures are key elements in helping us execute our previously announced strategic initiatives to lower our inventory and improve our cash flow in order to further reduce debt," Kallet said.
Oneida said it will report third-quarter results on Nov. 14.
|Additional Business News Stories|
OSLO, Norway, May 24 (UPI) --Norwegian oil and gas company DNO International said tests from a field in the Kurdish region of Iraq yielded an average flow rate of more than 100,000 bpd.