facebook
twitter
rss
account
search
search
 

Executive Business Briefing

Feb. 4, 2002 at 9:20 AM   |   Comments

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


Williams Communications: No plans for bankruptcy

TULSA, Okla., Feb. 4 (UPI) -- High-speed communications network operator Williams Communications Group Inc. said it does not expect to file for bankruptcy and also reported its fourth-quarter losses narrowed.

Williams said its banks had warned that it may be in default under its credit agreement, but it said it disagreed with the banks.

Due to recent negative developments in the telecommunications industry, Williams said its banks are questioning whether it can confirm the representations and warranties included in the credit agreement.

Williams said it agreed to submit to the banks by Feb. 25 a plan to restructure its balance sheet.

Williams said it strongly disagrees with the banks' position and believes it is not in default under the credit agreement or any other material agreement.

It said it does not currently envision seeking bankruptcy court protection or the substantial dilution of equity security holders.

Noting that the three major ratings agencies have maintained its credit ratings, Williams said it is taking significant steps to address market concerns that have focused on potential obligations related to its former telecommunications subsidiary.

After meetings last week with Williams management, all three of the major ratings agencies -- Moody's Investors Service, Fitch Ratings and Standard & Poor's -- retained Williams' current credit status.

While S&P added negative comments pending further review, it later said it would retract a portion of its opinion regarding the impact of Williams' stock price decline on bank borrowing.

"We are prepared to substantially expand our planned asset sale program and, if required, issue equity," said Steve Malcolm, president and chief executive officer, regarding Williams' commitment to address market concerns about the company's potential obligations related to Williams Communications.

"This is in addition to the major steps to enhance our balance sheet that we have already taken and will be pursuing.

"These actions will ensure that Williams retains adequate liquidity and appropriate debt and equity levels to support an investment-grade credit rating -- no matter the amount of our ultimate WCG exposure," he said, noting that the maximum exposure would not exceed the previously disclosed pre-tax $2.2 billion.

"We also commit that the steps we are taking will offset any reduction in stockholders' equity created by losses resulting from recognizing these obligations."

Williams said last week that it is determining whether there will be a need to recognize a charge related to its guarantee of Williams Communications obligations. To the extent that one is required, it will be recorded in the company's 2001 results as a loss from discontinued operations.

Malcolm said quantifying the level of any potential Williams Communications obligation is the only issue that remains to be resolved before Williams will report 2001 earnings.

Malcolm said Williams is planning to sell its large Midwest petroleum products pipeline and on-system terminals. A potential buyer would be Williams Energy Partners, L.P.

This sale would be in addition to, and more than double the cash proceeds from, the previously disclosed intention to sell non-core assets, Malcolm said.

"Although we've heard concern expressed about the timing of any potential asset sales, since Jan. 1 we have signed agreements on $56 million in sales, and we believe we could complete the sale of our products pipeline before the end of the second quarter of this year," Malcolm said.

The company also reported its fourth-quarter net loss narrowed to $372 million, or 76 cents a share, from $546.6 million, or $1.18 a share, a year earlier.

Excluding one-time items fourth quarter loss was 52 cents a share.

Revenues rose to $330.3 million from $287.0 million a year earlier.

Network revenues rose 36 percent to $302.8 million from a year earlier.


Priceline.com posts profit

NORWALK, Conn., Feb. 4 (UPI) --- Priceline.com Inc. said it posted a fourth-quarter profit before unusual items, compared with a loss a year-earlier, as growth in its hotel business helped the Internet commerce firm offset the slowdown in airline travel after the Sept. 11 attacks.

The company, which markets name-your-own-price air fares, car rentals and hotel reservations, said it posted a net income of $3.3 million, or 1 cent a share, compared with a loss of $25 million, or 15 cents a share during the same period a year earlier.

Revenues rose to $235.3 million from $228.2 million a year ago.

Analysts on Wall Street had expected the company to break-even, according to Thomson Financial/First Call.

Priceline reported a GAAP fourth-quarter net loss of $1.3 million, or 1 cent a share, compared with a loss of $105.1 million, or 62 cents a share, a year earlier.

Priceline said it ended 2001 with $164.6 million in cash and short-term investments, compared to a balance of $153.2 million at the end of the third quarter of 2001 and $106.0 million at the end of 2000.

"Priceline performed well in the fourth quarter, achieving year over year growth in revenue and pro forma earnings, despite continuing weakness in airline retail pricing and, consequently, in our airline ticket bind rate," said Jeffery H. Boyd, president and chief operating officer.

"We continue to diversify our revenue streams to non-air businesses, with hotel and rental car bookings constituting 47 percent of booked offers in the fourth quarter 2001, up from 31 percent in the fourth quarter 2000, and we are poised to benefit from the launch of our new vacation product and marketing alliances as well as from the eventual recovery of retail airline pricing," Boyd said.

Priceline said it sold a combined 2.3 million units of travel products during the fourth quarter 2001. The company sold 789,638 hotel room nights, a 115 percent increase over the fourth quarter 2000, 720,213 rental car days, a 38 percent increase over fourth quarter 2000 and 840,191 airline tickets, a 4 percent increase over the same period a year earlier.

Priceline.com also said that it added 854,082 new customers, raising its year-end 2001 total customer base to nearly 12.7 million.

"Looking forward, priceline.com is targeting first quarter 2002 revenue of between $260 million and $290 million, consistent with our expectation that industry conditions, and specifically low retail airline pricing, will continue to put pressure on our bind rate." said Richard Braddock, chairman and chief executive officer.

"We are managing the first quarter to a goal of between 0 to 2 cents pro forma earnings per share, including the effects of a significant increase in online and offline marketing spending and one cent of loss generated by consolidating our European operations," Braddock added.


Lowe's Cos. sees higher results

WILKESBORO, N.C., Feb. 4 (UPI) -- Home improvement retailer Lowe's Cos. Inc. said it expects its fourth quarter earnings and same store sales will exceed its earlier estimates due to better-than-expected weather, resilient consumers and expense controls.

Lowe's, the nation's second largest home improvement retailer, said it expects earnings will exceed previous guidance of 22 cents to 24 cents a share due to above-plan sales and margin growth.

It said same-store sales -- sales at stores open at least a year -- would grow more than its earlier forecast of 3 percent to 5 percent.

Analysts on Wall Street had been expecting the retailer to post a fourth quarter net income of 23 cents a share, according to Thomson Financial/First Call.

"Better than anticipated weather and a resilient consumer, combined with our merchandising and operations focus have resulted in fourth quarter comparable store sales in excess of our previous guidance of 3 to 5 percent," said Robert A. Niblock, executive vice president and chief financial officer.

Lowe's fiscal fourth quarter ended on Feb. 1, and operating results will be released on Feb. 25.


© 2002 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
1
Tesla could face sales ban in Michigan Tesla could face sales ban in Michigan
2
Early completion of refit of Italian aircraft carrier Early completion of refit of Italian aircraft carrier
3
British Reaper UAVs join the fight against Islamic State British Reaper UAVs join the fight against Islamic State
4
Russia doesn't fear Azeri gas, scholar says Russia doesn't fear Azeri gas, scholar says
5
Teledyne subsidiary gains contract for submarine work Teledyne subsidiary gains contract for submarine work
Trending News
Around the Web
x
Feedback