Here is a look at Tuesday's top business stories:
Martha Stewart target of criminal investigation
NEW YORK, June 3 (UPI) -- Martha Stewart Living Omnimedia Inc. said Tuesday that it has been informed by the attorneys for founder Martha Stewart that the U.S. Attorney's Office for New York is investigating Stewart for possible criminal conduct.
The company said, "The United States Attorney's Office intends to request the grand jury to return an indictment against her in the near future. Additionally, Martha Stewart Living Omnimedia has been informed that a civil complaint by the Securities and Exchange Commission is also expected."
Federal investigators have been weighing bringing criminal and civil securities-fraud charges against Stewart for her sale of nearly 4,000 shares of biotech company ImClone Systems Inc. stock back on Dec. 27, 2001, just days before an application for review of ImClone's promising cancer drug Erbitux was rejected. which caused the stock to drop sharply in value.
Stewart has insisted that she had an arrangement with her stock broker to sell the shares when they reached a certain price. But, Stewart, chairman and chief executive of Martha Stewart Living Omnimedia, is a close friend of ImClone founder Samuel Waksal, who last year pleaded guilty to insider trading and other securities-fraud charges.
Stewart repeatedly has denied any wrongdoing.
Martha Stewart Living Omnimedia and its directors "have been planning for a number of possible contingencies, are evaluating the current situation and will take action as appropriate," the company said.
The government probe appears to be taking a toll. In late April the company posted a wider-than-expected first-quarter loss of $4.5 million, or 9 cents a share. Revenue fell 15 percent to $58 million amid a slump in advertising and circulation revenue at its flagship magazine, Martha Stewart Living.
Stewart holds about 61 percent of its outstanding shares.
Avon reaffirms earnings outlook
NEW YORK, June 3 (UPI) -- Avon Products Inc. has reaffirmed its earnings and sales guidance for the second quarter and year, and said there is a potential upside for the year if foreign-exchange rates remain at their current levels.
Avon said it expects its second-quarter earnings to rise at a mid-single-digit rate from 64 cents a share a year ago. Earnings in the prior-year period include currency hedging gains that won't be repeated in the current quarter.
Analysts on Wall Street expect the company to post a second-quarter net income of 69 cents a share, according to Thomson First Call.
Avon also said it anticipates second-quarter sales growth to be in line with the first quarter, when sales were up 7 percent in dollars and 12 percent in local currencies compared with a year ago.
The beauty products maker said its overall sales growth is being driven by an anticipated 11 percent to 13 percent increase in beauty products sales, a larger sales team and product launches.
Wall Street analysts expect Avon's second-quarter sales to increase to $1.63 billion from $1.53 billion a year ago.
Avon Products also said it remains comfortable with its prior 2003 earnings target of $2.55 a share, but said it could exceed the guidance if foreign exchange rates remain at or near current levels.
Wall Street analysts expect Avon to post a net income of $2.56 a share for 2003, compared with operating income of $2.32 a share a year ago.
Chairman and Chief Executive Andrea Jung said, "The underlying health of Avon's business has never been stronger. That, combined with strengthening local currencies in some of our key markets, gives us confidence that 2003 will be another excellent year for the company."
