Here is a look at more of Tuesday's top business stories:
Northrop Grumman sells TRW Automotive to Blackstone Group
LOS ANGELES, Nov. 19 (UPI) -- Defense giant Northrop Grumman Corp. said it has signed a definitive agreement to sell the TRW Automotive unit of TRW Inc. to the Blackstone Group in a deal that valued at $4.725 billion.
The Blackstone Group, a private investment firm, recently raised the world's largest private equity fund at $6.45 billion, and the purchase of TRW Automotive will be the first investment made by this fund.
Under the terms of the deal, which is conditioned on the closing of the Northrop Grumman/TRW merger, the Northrop will receive $4.725 billion, comprised of $3.757 billion in cash, $600 million in debt securities and an initial $368 million equity interest, or approximately 42 percent of total equity of $868 million, in TRW Automotive.
The companies said they intend to reduce their initial equity positions in TRW Automotive before closing.
At the close of the deal, anticipated to be in the first quarter of 2003, Northrop Grumman's equity interest is expected to be approximately 20 percent, which would increase total cash consideration to between $3.9 billion and $4.0 billion.
Cash proceeds from the sale of TRW Automotive, along with the proceeds already received from the completed sale of TRW Aeronautical Systems, will be used to pay down debt, Northrop Grumman said.
All financing necessary to complete the transaction has been provided by JP Morgan, Credit Suisse First Boston and Lehman Brothers.
Kent Kresa, Northrop Grumman's chairman and chief executive officer, said, "We're very pleased to announce the sale of TRW Automotive. As we've maintained, Northrop Grumman's strategic interest is in TRW's space, electronics and systems businesses.
"We believe that our agreement with Blackstone is an attractive transaction for our shareholders and will allow our management team to quickly focus its full attention on integrating TRW's superior space and defense assets into our portfolio," Kresa said.
Ronald D. Sugar, Northrop Grumman's president and chief operating officer, added, "We look forward to benefiting from TRW's strong defense operations once the TRW merger is complete. In addition, we are pleased to be working on this transaction with Blackstone, which has a long history of making successful equity investments, including those in the automotive parts sector.
"Moreover, the separation provides a great opportunity for the employees of TRW Automotive to flourish as part of a new, focused stand-alone company," Sugar added.
Stephen A. Schwarzman, president and chief executive officer of Blackstone Group, said, "TRW Automotive is a leading global automotive supplier which enjoys a unique competitive position in the active and passive safety arena. We look forward to supporting the company's growth strategy as an independent company."
Northrop Grumman and TRW shareholder votes on the merger are scheduled for Dec. 11. The sale of TRW Automotive is also subject to customary closing conditions including review under the Hart-Scott-Rodino Act and obtaining certain other governmental and regulatory approvals in the U.S. and Europe.
BJ's misses Wall Street's expectations
NATICK, Mass., Nov. 19 (UPI) -- Warehouse club operator BJ's Wholesale Club Inc. said its third-quarter net income before items, was to $23.4 million, or 33 cents a share, compared with a loss of $33.5 million, or 46 cents a share during the same period last year.
Net income for the latest quarter included charges for store closings, asset impairment, executive severance and interest accretion related to House2Home. These expenses were partially offset by a gain from reducing the company's House2Home lease obligations.
Excluding these items, earnings would have been $26.6 million, or 38 cents a diluted share.
Analysts on Wall Street, which typically exclude one-time items, had expected the company to report a net income of 37 cents a share, according to Thomson First Call.
BJ's, the largest club chain in the eastern section of the country, posted a profit before items of $29.5 million, or 40 cents per share, in the year-earlier period.
Net sales increased by 11 percent to $1.4 billion, with a 0.1 percent decline in comparable club sales.
BJ's operates 139 clubs and 64 gas stations in 16 states.
Earnings surge at Williams-Sonoma
SAN FRANCISCO, Nov. 19 (UPI) -- Housewares retailer Williams-Sonoma Inc. said its third-quarter net income surged to $15.1 million, or 13 cents a share, from $3.9 million, or 3 cents a share during the same period last year.
The results came in ahead of the company's expectations and Williams-Sonoma also raised its earnings guidance for the year to $1.03 to $1.04 a share from $1 to $1.02.
Analysts on Wall Street had expected the company to report a net income of 10 cents a share, according to Thomson First Call. Williams-Sonoma forecast earnings of between 9 cents and 10 cents per share in the quarter. At that time it also cut its same-store sales growth view to between 2 percent and 4 percent, from between 5 percent and 6.5 percent.
The company, which operates its high-end namesake stores and the Pottery Barn chain, said revenue climbed 14.2 percent to $527.9 million from $462.1 million a year ago.
Net retail sales increased 18.8 percent to $306.1 million from $257.6 million in the third quarter of 2001.
The company said it operated 477 stores as of Nov. 3 when it had 412 stores on Oct. 28, 2001.
Sales at stores open at least a year, or same-store sales, rose 2.8 percent.
Dale Hilpert, chief executive officer, said, "Although we were challenged during the third quarter of 2002 by a continued weakness in the economy and a disruption in the supply chain due to the West Coast port situation, the management team remained focused on driving the business and delivering its financial commitments.
"Our third-quarter results again demonstrated the organization's ability to profitably drive top-line sales growth in a difficult economic environment, while at the same time, aggressively managing inventories, increasing operating margins and improving its return on assets. As we look forward to the fourth quarter, we remain cautious in our top-line guidance, but are optimistic that we can continue the operating improvements we have seen in the first three quarters of 2002," Hilpert said.
