Executive Business Briefing

Here is a look at more of Wednesday's top business stories:

Earnings fall at DuPont

WILMINGTON, Del., Jan. 23 (UPI) -- DuPont Co., the nation's largest chemical company, said its fourth quarter net income before one-time items fell to $124 million, or 12 cents a share, from $494 million, or 47 cents a share during the same period a year earlier.

Analysts on Wall Street had expected DuPont to post a net income of 11 cents a share, according to Thomson Financial/First Call.

DuPont said its fourth quarter after-tax earnings were reduced by about $370 million due to lower volumes and selling prices, partly offset by an estimated $120 million after-tax benefit from lower energy and related raw material costs.

Fourth quarter reported earnings per share were $3.82. One-time items in the quarter totaled a net gain of $3.70 a share and included a gain of $3.72 a share on the sale of DuPont Pharmaceuticals.

"In 2001, we restructured to meet current and future challenges; we focused capital and research expenditures on growth; and we sold the Pharmaceuticals and selected Polyester businesses. These actions helped us come out of a difficult year with exceptional financial strength," said Charles O. Holliday, Jr., DuPont chairman and chief executive officer.

"Clearly more remains to be done for us to deliver competitively superior earnings performance--which we will do," he said.

For the quarter, consolidated sales dropped to $5.2 billion from $6.3 billion a year earlier. Segment sales, including transfers and the company's pro rata share of sales by equity affiliates, were $5.9 billion compared with $7.2 billion a year ago. Excluding the reduction in sales attributable to divested businesses, segment sales were down 12 percent.

DuPont said its worldwide sales declined 17 percent reflecting a 9 percent reduction from lower volume, 3 percent from lower U.S. dollar prices, and a 5 percent reduction from portfolio changes.

U.S. fourth quarter sales volume was down 14 percent, reflecting ongoing weakness in major U.S. industrial markets.

In Europe, a volume decline of 7 percent was partly offset by the stronger euro, which increased sales by 3 percent.

Asia Pacific volume was flat after experiencing a 6 percent year-on-year decline in the third quarter. Weakening currencies reduced regional sales by 4 percent.

Looking ahead the company said it expects 2002 underlying earnings per share to exceed those of 2001, despite continued pressure for the recession through at least the first quarter 2002.

The company expects that its first quarter 2002 underlying earnings per share will be substantially above fourth quarter 2001, though below first quarter 2001.

Earnings rise at Wachovia

WINSTON-SALEM, N.C., Jan. 23 (UPI) -- Wachovia Corp., the nation's fourth largest bank holding company, said its fourth quarter net income rose to $730 million, or 54 cents a share, from a pro forma net income of $599 million, or 60 cents a share during the same period a year earlier.

Wachovia was formed in September last year after First Union Corp. bought the old Wachovia and took its name.

The company posted cash operating earnings of 71 cents a share in the fourth quarter last year, and operating earnings of 58 cents a share.

Analysts on Wall Street had expected Wachovia to post a net income of 58 cents a share, according to Thomson Financial/First Call.

"Strong revenue growth in the fourth quarter of 2001 enabled all four of Wachovia's core businesses to produce solid results for our shareholders," said Ken Thompson, Wachovia president and chief executive officer.

"We're seeing the power of the incredible franchise that we have created through the merger of First Union and the former Wachovia as we focus our combined resources on serving our customers," Thompson said.

"The actions that we took in previous quarters have served us well in a weak economy. We met our earnings goals even with an increase in net charge-offs related to a large credit in the energy services sector. Our merger integration is progressing very well and we believe we are in excellent position to continue to grow core earnings as we work diligently to smoothly combine our two companies," he added.

Earnings rise 11 percent at General Dynamics

FALLS CHURCH, Va., Jan. 23 (UPI) -- General Dynamics said its fourth quarter net income rose 11 percent to $246 million, or $1.21 a share on a fully diluted basis, from $219 million, or $1.09 a share during the same period a year earlier.

Sales jumped to $3.5 billion from $2.7 billion a year ago.

Analysts on Wall Street had expected the company to post a net income of $1.21 a share, according to Thomson Financial/First Call.

"This was another year of strong, steady performance," said Nicholas D. Chabraja, General Dynamics chairman and chief executive officer.

"Cash flow from our business units totaled more than $300 million in the fourth quarter and reached a billion dollars for the full year. Backlog at the end of 2001 totaled almost $30 billion, an increase of nearly 50 percent from a year ago," Chabraja said.

"Sales in the Combat Systems group increased by 93 percent in the fourth quarter and by 74 percent for the full year, the result of acquisitions as well as strong organic growth," Chabraja noted.

"The acquisition of Primex early in 2001, now called Ordnance and Tactical Systems, and the acquisition of Spain's leading defense manufacturer, Santa Barbara Sistemas, made solid contributions to sales and earnings. Strong results also reflected new programs, such as the Interim Armored Vehicle for the Army, sales of the Abrams main battle tank to Egypt, and growth of the Marine Corps' Advanced Amphibious Assault Vehicle program," Chabraja said.

General Dynamics also said its Information Systems and Technology group revenues were up 46 percent in the fourth quarter and 17 percent for the full year, reflecting the acquisition of Decision Systems in late September.

Agere posts loss, plans to combine some operations

ALLENTOWN, Pa., Jan. 23 (UPI) -- Semiconductor maker Agere Systems Inc. said it posted a fiscal first-quarter operating loss and announced plans to combine its Pennsylvania and New Jersey operations and said it is seeking a buyer for its wafer fabrication operation in Orlando, Fla.

Citing weak demand for its products amid the communications industry spending slowdown the company, a former unit of Lucent Technologies Inc., said it posted a net loss of $282 million, or 17 cents a share, compared with a net profit of $102 million, or 6 cents a share during the same period last year.

Revenues fell to $537 million from $1.36 billion a year ago.

The company in October warned its first quarter operating loss, before one-time items, would be 22 cents to 23 cents a share. It said revenues would be down 10 percent from the previous quarter's $600 million due to soft demand for its chips and fiber-optic products.

Agere also announced plans to combine its Pennsylvania and New Jersey operations as the company streamlines its business to improve operating efficiency and accelerate time to market.

The company said over the next 12 to 18 months, it will move the majority of its operations from its Breinigsville and Reading, Pa., manufacturing and development sites to its Allentown, Pa., campus.

The company said it will discontinue operations at the two facilities and will seek buyers for those properties.

Agere's Reading facility, located in Muhlenberg Township, has 1,600 employees, and the Breinigsville location, in Upper Macungie Township, employs 1,100 people.

The company said it expects that its plans to combine operations from these facilities into Allentown will result in a net reduction of about 300 positions.

Agere also said it will transfer about half of its approximately 700 corporate support and product development positions currently in New Jersey locations to Allentown. The remaining 350 research and development positions in New Jersey will move to a new site in central New Jersey over the next several months.

Through the consolidation of operations from nine sites to the Allentown campus and one New Jersey location, the company will reduce its square footage in the two states by approximately two million square feet or about 50 percent, significantly lowering costs.

"We are streamlining our business to create an operating model that will best support Agere's future profitable growth and improve our ability to meet customers' needs," said John Dickson, president and chief executive officer.

Once these actions are complete, Agere will have about 6,000 employees in Pennsylvania, representing about half of its workforce worldwide.

Agere also said it is seeking a buyer for its wafer fabrication operation in Orlando. The company's plant in Orlando primarily manufactures advanced complementary metal oxide semiconductor integrated circuits for use in a broad range of communications and computer devices, ranging from computer disk drives to network communications systems.

The facility has a workforce of more than 1,100 employees in manufacturing, research and development and corporate support functions.

Preliminary discussions have taken place with potential buyers who can benefit from the technology and process development capabilities of the Orlando operations, as well as the talents of its workforce.

The company's intention is that the employees who support the site's operations will move with the sale.

"Our intent is to sell the facility as an ongoing operation that would continue to be a source for our products," said Mike Watson, wafer fabrication vice president.

Agere has implemented a number of actions to improve operating efficiency and accelerate time to market, while reducing fixed costs and lowering its revenue breakeven level.