Executive Business Briefing

NEW YORK, Feb. 8 (UPI) -- Here is a look at more of Friday's top business stories:

Earnings fall 31 percent at Cigna

PHILADELPHIA, Feb. 8 (UPI) -- Cigna Corp., the nation's third largest health insurer, said its fourth quarter net income after special charges fell 31 percent to $191 million, or $1.32 a share, from $277 million, or $1.76 a share during the same period a year earlier.

Cigna said before charges of $62 million for cutting 2,000 jobs and restructuring its customer service operations, its latest net income was $1.92 a share.

The company also recorded an after-tax gain of $27 million in the fourth quarter for the sale of life insurance operations in Japan, and a gain of $14 million for the sale of its life reinsurance business.

Analysts on Wall Street had expected the compnay to post a net income of $1.81 a share, according to Thomson Financial/First Call.

Revenues fell to $4.9 billion from $5.1 billion a year ago due to the sale of life insurance operations in Japan and the withdrawal from Medicare supplemental insurance markets.

Looking ahead the company forecast 2002 operating earnings of $7.85 to $8.15 a share, including the impact of new goodwill accounting rules, in line with its earlier guidance.

Cigna said it expects its restructuring program, which will pare its work force of 43,900 by 4.6 percent, to produce after-tax savings of $45 million to $55 million starting in 2003.

Corning sees results in line with expectations

CORNING, N.Y., Feb. 8 (UPI) -- Corning Inc., citing continued confidence in its long-term strategy, said it expects first quarter results largely in line with Wall Street expectations and said the quarter will mark the bottom for its businesses.

The world's largest maker of fiber-optic cable said it expects to post a loss, before special items, of 14 cents to 18 cents a share on revenues in a range of $925 million to $950 million.

Analysts on Wall Street were expecting Corning to posts a loss of 17 cents on revenues of $944.25 million, according to Thomson Financial/First Call.

John W. Loose, president and chief executive officer, said, "We are carefully walking the line between realism and optimism. We believe that the first quarter of this year will represent a bottoming out across our businesses as revenues are expected to approximate those of the fourth quarter last year.

"Although it appears that our revenue stream will improve as the year plays out, the pace and timing of recovery is uncertain," he added.

Corning said it expects to be free cash flow positive late in the year, but will have negative free cash flow for the full year. It ended 2001 with $2.2 billion in cash and also has a $2 billion credit line available for use.

"The company's cash and liquidity resources are ample to cover ongoing business requirements," said Chief Financial Officer James Flaws.

Corning expects fiber shipments, which were weak last year, to rise at least 15 percent in the first quarter from the previous quarter.

Corning also said it will invest about $550 million in research and development, and reiterated that it expects capital spending this year to be about $500 million. It spent $1.7 billion on capital projects last year.

Earnings fall at Footstar

WEST NYACK, N.Y., Feb. 8 (UPI) -- Footwear retailer Footstar Inc. said its fourth quarter net income fell to $9.1 million, or 44 cents a diluted share, from $17.5 million, or 85 cents a diluted share during the same period a year earlier.

The operator of the Footaction and Just for Feet athletic shoe chains said excluding unusual items, earnings were $12.5 million, or 60 cents a share, compared with $19.5 million, or 95 cents a share a year earlier.

Analysts on Wall Street had expected the company to post a net income of 60 cents a share, according to Thomson Financial/First Call.

Sales rose 3.7 percent to $638 million from $615.3 million. Sales at stores open at least a year, or same-store sales, declined 6.1 percent.

In January the retailer said it expected to earn 60 cents a share in the quarter, ended Dec. 29. At that time, analysts' estimates ranged from 72 cents to 90 cents a share.

Air Canada posts record loss

MONTREAL, Feb. 8 (UPI) -- Air Canada said it posted a record 1.25 billion Canadian dollars ($788 million) loss for all of 2001, larger than the 82 million Canadian dollar loss posted during all of 2000.

Canada's dominant carrier said its fourth quarter net loss widened to 380 million Canadian dollars, from 274 million Canadian dollars during the same period a year earlier.

The carrier said its fourth quarter revenues fell to 2.1 billion Canadian dollars from 2.6 billion Canadian dollars a year earlier, largely because of a drop in traffic to the United States after the Sept. 11 attacks.

Passenger traffic fell 11 percent in the quarter, while passenger revenues dropped 20 percent.

Air Canada estimated that the Sept. 11 attacks hurt its after-tax results by 156 million Canadian dollars in the fourth quarter.

In the fourth quarter, Air Canada's yield, or revenue per passenger mile, a measure of how much money it made on each seat sold, fell more than 2 Canadian cents to 18.7 Canadian cents from 20.9 Canadian cents in the year-earlier quarter.

"Air Canada's fourth-quarter and full-year performance reflect the extraordinarily difficult environment in which we and other comparable North American carriers were operating," said Air Canada president and chief executive Robert Milton.

"Like the rest of the international airline industry, we experienced an unprecedented decline in business travel due to the economic downturn along with high fuel prices. Then came the devastating impact of Sept. 11," he said.

Milton said he expects the airline to return to profit over its seasonally strong quarters, but he did not specify when that would happen. Analysts do not expect the carrier to post an annual profit until at least 2003.

Air Canada said January traffic was 0.9 percent below year-ago levels. Capacity was 9 percent below year-ago levels, resulting in a load factor of 73 percent.

The carrier ended the year with 34,900 employees, which is 6,600 or 15 percent fewer than the 41,500 it had in 2000.

Air Canada had 226 aircraft in its operating fleet by Dec. 31, down from 242 a year earlier. Capacity fell 15 percent from the 2000 quarter, while its passenger load factor rose to 68.8 percent from 65.6 percent.

The airline expects its capacity to fall 5 to 6 percent in the first quarter and expects to provide about 67 percent of total domestic scheduled seats available over the three months.

Auto production declines

SOUTHFIELD, Mich., Feb. 8 (UPI) -- Ward's Automotive Reports said vehicle production this week in the United States, Canada and Mexico is expected to decline to an estimated 336,653 units from the 337,882 cars and trucks built last week.

Including this week's estimates, calendar year North American output now totals 1,764,422 vehicles, up 5.8 percent from the same period last year.

Ward's said in the U.S., automakers are expected to produce 243,000 vehicles this week, down 0.4 percent from the 243,993 cars and trucks built last week. To date, calendar 2002 U.S. vehicle output totals an estimated 1,287,541 units, up 10.2 percent from the 1,168,127 vehicles built during the same period a year earlier.

This week's Canadian vehicle production is estimated at 60,180, a 0.2 percent decrease from the 60,318 units assembled last week. Estimated calendar-2002 Canadian vehicle production now stands at 288,888 units, down 3.4 percent compared to the 299,074 vehicles produced during the same period a year ago.

Of the cars and trucks slated for production this week in the U.S., General Motors accounted for 33.8 percent, Ford Motor 26.1 percent, Chrysler of DaimlerChrysler 14.6 percent while other manufacuturers accounted for the remainder.