Here is a look at more of Wednesday's top business stories:
Soaring debt drives companies to bankruptcy
PALM BEACH GARDENS, Fla., May 1 (UPI) -- Weiss Ratings Inc. said 71 publicly traded companies filed for bankruptcy in the first quarter due primarily to excessively high levels of debt.
The nation's leading independent provider of ratings and analyses of financial services companies, mutual funds and stocks said if bankruptcy filings continue at the pace set in the first quarter, the number of public companies seeking protection under Chapter 11 or liquidating under Chapter 7 will top 284 by the end of the year, up from 257 in 2001 and well above the 176 companies in 2000.
Chairman Martin D. Weiss said, "The handwriting was on the wall in big bold letters, months in advance at every one of these companies, especially the giants like Kmart and Global Crossing.
"And yet, major Wall Street firms continued to maintain buy or hold ratings for most of their shares, often until the bitter end," Weiss said.
Of the 71 companies that declared bankruptcy in the first quarter of the year, 62 had publicly traded common stock.
Weiss rated 36 of the 62 companies at least three months before the bankruptcy filing, assigning a weak or very weak investment rating to 94 percent of them.
Moreover, Weiss said it identified 100 percent of the stocks as having a high level of risk at least three months before the filing.
Looking ahead, Weiss said it finds the sectors most vulnerable to continuing bankruptcies are steel, auto parts and equipment, and wireless telecommunications.
"Investors holding shares in companies that go bankrupt usually suffer a total or near-total loss, even if the company subsequently re-emerges from Chapter 11," Weiss said. "Investing in today's uncertain times without an independent evaluation of the company's prospects is like playing Russian Roulette."
Cisco buys Hammerhead Networks and Navarro Networks
SAN JOSE, Calif., May 1 (UPI) -- Cisco Systems Inc., the world's largest maker of equipment that directs Internet traffic, said it has signed definitive agreements to acquire two privately held companies in exchange for up to $258 million of its common stock.
Cisco said it expects a one-time combined charge for purchased in-process research and development not to exceed 2 cents a share related to the acquisition of Hammerhead Networks Inc. of Billerica, Mass., and Navarro Networks Inc. of Plano, Texas. Both deals are expected to close in Cisco's fiscal fourth quarter.
Cisco said it will acquire all outstanding shares and options in Hammerhead that it does not already own in exchange for common stock worth up to $173 million. Cisco currently holds a minority interest in Hammerhead, which was founded in 2000 and employs 85 people.
Cisco also said it will acquire all the outstanding shares and options in Navarro that it does not already own for common stock worth up to $85 million. Cisco currently holds a minority interest in Navarro, which was founded in 2000 and employs 25 people.
Cisco said Hammerhead's software products will augment its Internet Protocol aggregation portfolio, which includes cable, high-speed Internet and leased-line products, while Navarro's application-specific integrated circuit components will compliment Cisco's Ethernet switching products.
Agile Software cuts staff, lowers outlook
SAN JOSE, Calif., May 1 (UPI) -- Agile Software Corp., a business-to-business software maker, said it will cut about 15 percent of its workforce, and expects to post fiscal fourth quarter results weaker than analysts expect due to weak industry demand.
The company said the weak industry conditions have caused reduced demand for products, leading it to streamline its organization to match the lower revenues, including cutting its staff by about 15 percent. The company did not disclose how many people it employs.
The company also said it expects revenue for the quarter ended April 30 to be about $15 million, while for the year it sees about $77 million.
Based on those estimates, it expects to post a loss before one-time items in the quarter of 23 cents to 26 cents a share, and for the year a loss of 55 cents to 58 cents a share.
Analysts were expecting a fourth-quarter loss of 13 cents a share, and a year loss of 44 cents a share, according to Thomson Financial/First Call.
Agile is scheduled to report fourth-quarter and year-end results on May 23.
Bryan Stolle, president and chief executive officer, said, "The purchasing environment for application software remains difficult in discrete manufacturing, particularly in high tech and electronics. Demand for our products, and for enterprise applications in general, has not improved.
"It is unclear that a market rebound is imminent, and it is therefore prudent to align the company's organization, resources, and expenses with current economic realities," he added.
Agile also named Carolyn Aver its chief financial officer. Prior to joining Agile, she served as a financial executive and CFO at companies such as Autodesk, USWeb/CKS and myCFO.com.
Rick Browne, who had served as interim CFO, will resume his role as vice president of finance.
Comcast posts loss
PHILADELPHIA, May 1 (UPI) -- Comcast Corp., the nation's third largest cable television operator, said its first quarter operating cash flow rose 27.5 percent to $808.2 million from $634.2 million a year earlier.
Analysts prefer cash flow as a measurement of cable companies' performance because it excludes depreciation, amortization and other costs associated with acquisitions and system upgrades.
Including such expenses and other one-time items, Comcast posted a net loss of $88.9 million, or 9 cents a share, compared with a net income of $1 billion, or $1.04 a share during the same period last year.
Last year the company benefited from a one-time gain from accounting changes.
Revenues rose 20 percent to $2.67 billion from $2.23 billion a year ago.
Brian L. Roberts, president said, "We delivered another quarter of outstanding operating and financial results, laying the groundwork to comfortably meet our previously stated year-end 2002 guidance for each of our businesses.
"The cable division reported one of its best quarters ever, accelerating revenue and operating cash flow growth and delivering new digital and high-speed Internet customers, even as we completed the huge task of transitioning almost 1 million customers to our new high-speed Internet service," he said.
"We are more excited than ever about the opportunities for growth in the cable business and look forward to completing our merger with AT&T Broadband. We believe our strong track record of operating performance, successful system integration and balance sheet strength will help support accelerated growth rates and provide a whole new range of opportunities for the new company," Roberts said.
The company said its cable division revenues rose 12.3 percent to $1.47 billion from $1.31 billion a year ago. Operating cash flow for the quarter increased 13.5 percent to $597.5 million from $526.3 million last year.
Cable subscribers grew to 8.512 million, a pro forma 12-month trailing growth rate of 0.9 percent.
High-speed Internet service revenue more than doubled over the first quarter of last year.
The company said its cable division added 203,700 digital cable subscriptions in the first quarter, a weekly average of more than 15,600. Comcast Cable finished the quarter with 2.54 million digital cable subscriptions and a subscription penetration rate of over 30 percent.
During the quarter, the cable division added 92,400 high-speed Internet customers and Comcast Cable finished the quarter with 1.041 million high-speed Internet customers.
Earnings climb at Kroll
NEW YORK, May 1 (UPI) -- Corporate security firm Kroll Inc. said its first quarter net income rose sharply, citing corporate restructuring and surging demand for its security services after the Sept. 11 attacks.
Kroll reported its net income jumped to $2.3 million, or 10 cents a share, from $470,000, or 2 cents a share during the same period last year.
Analysts on Wall Street were expecting the company to post a net income of 8 cents a share, according to Thomson Financial/First Call. Net sales rose to $56.0 million from $50.8 million in a year ago.
Jules Kroll, executive chairman of the board, said, "As organizations continue to address their global security needs, our security services engagements are now both larger and longer, giving us more predictable and stable revenue streams."
Looking ahead, the company also forecast 2002 revenue growth of 13 percent to 18 percent and operating income growth as a percentage of sales of 9 percent to 10 percent from the year before, because of strong demand for its security and investigative financial services.
The 2002 forecast does not include its proposed $140 million acquisition of data recovery firm Ontrack Data International Inc. or any other potential acquisitions, Kroll said.
Earnings rise 11 percent at Steven Madden
LONG ISLAND CITY, N.Y., May 1 (UPI) -- Shoe designer Steven Madden Ltd. said its first quarter net income rose 11 percent to $4.1 million, or 30 cents a diluted share, from $3.7 million, or 29 cents a diluted share during the same period last year.
Analysts on Wall Street expected the company to post a net income of 27 cents a share, according to Thomson Financial/First Call. Net sales rose to $66.6 million from $53.4 million a year ago.
The company, which operates 73 company-owned retail stores, said same store sales rose 14 percent.
Arvind Dharia, chief financial officer, said, "During the quarter we continued to drive top line growth while also carefully controlling our cost structure and increasing efficiencies.
"As a result, operating expenses, as a percent of sales, decreased 120 basis points and operating income increased 18.2 percent," he added.
Last month, the company's founder, Steven Madden, was sentenced to 41 months in prison and ordered to pay $3.1 million in restitution for his role in schemes to manipulate the prices of initial public offerings
