Here is a look at more of Friday's top business stories:
Duke Energy says it received subpoenas
CHARLOTTE, N.C., July 12 (UPI) -- Duke Energy Corp. said it received subpoenas from federal agencies requesting documents relating to its trading activities.
Duke said the subpoenas were from the U.S. Commodity Futures Trading Commission, which has served subpoenas on other energy companies for information on their trading activities.
The company said it also received a subpoena from the Houston office of the U.S. attorney regarding a grand jury investigation.
Duke said both subpoenas request information and documents relating to trading activities, including round trip trades, which are trades between two counter parties of the same volumes at the same price.
Duke said it was cooperating with both agencies.
Duke Energy manages a portfolio of natural gas and electric supply, delivery and trading businesses.
Guilford Mills files plan to emerge from bankruptcy
GREENSBORO, N.C., July 12 (UPI) -- Fabric maker Guilford Mills Inc. said it has filed a plan that will help it emerge from bankruptcy proceedings by Sept. 30, the end of its fiscal year.
Guilford said the plan, which still needs approvals from bankruptcy court and several creditors' groups, will allow senior lenders to own 90 percent of the company and the remaining 10 percent by its existing shareholders.
The company, which filed for Chapter 11 bankruptcy protection on March 13, said its senior debt facilities will be $150 million, down from $270 million before entering the court.
It added that suppliers will be paid in full, while the company expects sales and operating profits to continue to exceed expectations.
John A. Emrich, president and chief executive officer, said, "I'm very pleased to announce that in accordance with a term sheet agreed to in March with our senior lenders, we filed with the bankruptcy court a plan of reorganization that will significantly reduce our senior debt, allowing us to focus on our core operations.
"Quite simply, we are moving toward a swift and successful reorganization," Emrich said.
Earnings decline at UPS
ATLANTA, July 12 (UPI) -- United Parcel Service Inc., the world's largest package delivery company, said its second quarter earnings fell to $611 million, or 54 cents a share, from $630 million, or 55 cents a share during the same period last year.
UPS earlier this week said it was losing business to rivals because it had not yet reached a contract settlement with the International Brotherhood of Teamsters.
The company said it released its results earlier than scheduled because of its recent inclusion in the Standard & Poor's 500 index.
For the quarter ended June 30, revenue rose 2.5 percent to $7.68 billion from $7.49 billion a year ago.
During the quarter, the company said its U.S. domestic package business experienced declines in package volume that accelerated as the quarter ended.
The declines were attributable both to slow economic conditions and customers diverting package volume to competitors due to unresolved contract negotiations with the International Brotherhood of Teamsters.
Within the U.S. domestic segment, revenue declined 1.2 percen to $5.91 billion from $5.98 billion a year ago. Total U.S. domestic package volume declined 2.6 percent for the quarter, with volume declining 4 percent in June.
Scott Davis, chief financial officer, said, "Clearly the contract talks and the continuing weakness in the U.S. economy reduced earnings in the domestic business, but we're pleased with the momentum outside the United States."
Citing the uncertainty regarding labor negotiations, Davis said UPS was unable to offer future guidance at this time.
"We will provide additional information on July 23 when we release more detailed earnings information and conduct our scheduled conference call," he said.
Veeco buys FEI for $1 billion in stock
WOODBURY, N.Y., July 12 (UPI) -- Veeco Instruments Inc., a maker of micro-manufacturing gear, said it has has reached an agreement to acquire FEI Co. for $1 billion in stock, creating the sixth-biggest U.S. maker of chip-making equipment.
FEI, which makes equipment for the semi-conductor industry, will become a wholly owned subsidiary of Veeco and the company will be renamed Veeco FEI Inc.
Under the agreement FEI shareholders will receive 1.355 shares of Veeco for each FEI share. FEI has 32 million shares outstanding, the companies said.
The deal has been approved by both boards of directors and is expected to be completed in the fourth quarter.
The transaction is expected to be accretive to Veeco's current 2003 consensus estimates on a pro-forma basis.
Both companies expect to meet previous guidance for the second quarter.
Veeco was forecasting breakeven results on a per-share basis, while FEI was expecting profits of 15 cents a share.
The new company will be headquartered in Veeco's current headquarters in Woodbury, New York while FEI's headquarters in Hillsboro, Oregon will remain a company facility. The combined company will employ 2,900 people.
The acquisition is the latest in a string of acquisitions by Veeco and also signals further consolidation in the semiconductor-equipment market.
The purchase will give Veeco a larger presence in the business of microscopic measurement systems used to make semiconductors, data-storage devices and other electronics products.
Veeco has made 11 acquisitions or technology investments over the past five years.
Vahe A. Sarkissian, FEI's chairman, president and chief executive officer, who will become chairman of the board and chief strategy officer of Veeco FEI, said, "We believe this merger has compelling strategic value. Together, we join the ranks of top tier companies with the critical mass to create more value for our customers and stockholders.
"We intend to leverage our enriched technology portfolio to accelerate growth by delivering broader product offerings to our customers and building new markets. Additionally, our combined channels should also enhance growth opportunities and achieve new operating efficiencies. The new Veeco FEI will be far better positioned to capitalize on the economic upturn, with a combined management team that has a proven track record of building companies with strong revenue and profit growth," he said.
Edward H. Braun, Veeco's chairman, president and chief executive officer, who will remain chief executive officer and president, said, "The combination of Veeco and FEI creates a leading metrology and process equipment company, providing solutions for growth opportunities in semiconductor, data storage, telecom/wireless and scientific research markets.
"Based on combined 2001 sales of $825 million, together we become the sixth largest U.S. semiconductor equipment company and the third largest U.S. supplier of metrology equipment." Braun added.
Williams may sell interstate natural gas pipeline
TULSA, Okla., July 12 (UPI) -- Williams Cos. said it is considering selling its interstate natural gas pipeline in the central United States to try to improve its finances and develop a more focused portfolio of energy businesses.
The company, which is also involved in energy trading, has said it plans to raise more than $3 billion over the next year, mostly by selling assets and issuing new stock.
Williams has been working to shore up its balance sheet after the collapse of energy trader Enron Corp. caused investors and credit agencies to increase their scrutiny of the sector.
Williams said undisclosed parties have expressed interest in the 6,000-mile system, which transports natural gas from Kansas, Oklahoma, Texas, Wyoming and Colorado to markets in the Midcontinent.
The system has design capacity of 2.3 billion cubic feet per day, with annual throughput of 337.5 trillion British thermal units.
Last week, Williams said it plans to sell its Kansas Hugoton natural gas gathering system for $100 million in cash.
Earnings rise at A.O. Smith
MILWAUKEE, July 12 (UPI) -- Motor manufacturer A.O. Smith Corp. said its second quarter net income rose 68 percent to $18 million, or 66 cents a share, from $10.7 million, or 45 cents a share during the same period last year.
Analysts on Wall Street had expected the company to post a net income of 49 cents a share, according to Thomson Financial/First Call.
Sales rose to $386.3 million from $308.2 million a year ago due mainly to sales at the State Industries water heater operations which A.O. Smith bought last December.
The company also raised its full-year earnings forecast to a range of $1.70 to $1.80 a share, with further cost cuts offsetting a 17-cent share dilution from the sale of 4.8 million shares in May.
The First Call estimate for 2002 is $1.55 a share.
|Additional Business News Stories|
TEL AVIV, Israel, May 17 (UPI) --Nobel Energy of Houston, which discovered Israel's big gas fields in the eastern Mediterranean, is pressing the government to decide soon on an energy export policy as the prospect of an undersea pipeline to Turkey gains credibility.