Here is a look at more of Tuesday's top business stories:
Earnings fall 51 percent at Charles Schwab
SAN FRANCISCO, Oct. 16 (UPI) -- Discount broker Charles Schwab Corp. said its third quarter net income fell 51 percent to $81 million, or 6 cents a share, from $165 million, or 12 cents a share during the same period last year.
The latest reports excluded a one-time gain on the sale of a business and costs related to restructuring and acquisitions. Including the gain the company reported net income of $13 million, or 1 cent a share.
Analysts on Wall Street had expected the company to post a net income of 5 cents a share, according to Thomson Financial/First Call.
Schwab, which manages $768 billion in total client assets, said its operating revenues fell 25 percent to $997 million, as commission revenues fell 42 percent to $276 million.
Schwab's principal transaction revenue fell 57 percent, while net interest income fell 27 percent. Net interest income is derived from margin lending, which slumped as customers were averse to borrowing money for stock investments.
The company managed to pull in $18 billion in net new assets during the quarter, but customer portfolio losses resulted in a 20 percent decline in total client assets.
Chairman and Co-Chief Executive Officer Charles R. Schwab said, "The uncertainty surrounding the duration and severity of the current economic slowdown has only increased following the horrific events of September 11. Nevertheless, we are encouraged by Schwab's ability to continue building stronger relationships with its clients during such a tough quarter -- our clients opened 184,000 new accounts and we ended the period with 7.8 million active accounts.
"In addition, new and existing clients brought a total of $18 billion in net new assets to the firm. Total client assets at month-end September 2001 were $768 billion, 20% below the year ago level, reflecting the general decline in market valuations," Schwab said.
"Even in an environment that included the weakest client trading activity since the fourth quarter of 1998, we were able to deliver credible financial performance in the third quarter," he said.
President and Co-CEO David S. Pottruck said, "As we all struggle with last month's tragedy, our progress in building a full-choice, full-service firm is more important than ever to our clients. In a volatile and cloudy environment, our clients have turned to us in increasing numbers for perspective and guidance in managing their investments for the long term."
Reuters posts higher revenues, cuts staff
LONDON, Oct. 16 (UPI) -- Reuters Group Plc said its third quarter revenue improved 4 percent but also scaled back its revenue forecasts for the remainder of the year.
Reuters also said in view of the tough trading conditions, it plans to accelerate its cost savings program by cutting another 500 jobs after already announcing 1,100 job cuts in July.
Revenue for the three months ended September 30 rose 4 percent to $1.3 billion. According to Reuters that was in line with Wall Street's expectations.
The company suffered from the sharp decline in financial markets as the global economy slowed, which hit trading volumes at its 83-percent owned Nasdaq-listed electronic broker Instinet.
Underlying revenue, which excludes the impact of acquisitions, disposals and currency movements rose 1 percent.
"During the third quarter, uncertain market conditions and prospects for economic slowdown became more pronounced, particularly following September 11," the company said.
In light of the current market conditions, Reuters said it is accelerating its cost cutting program.
The company also plans to cut its dividend payment in line with a strategy to invest profits in growth opportunities and to reach a five-year goal of sustainable double-digit profit growth and fatter margins.
Chief executive Tom Glocer said: "We have delivered sound results given difficult trading conditions. More importantly, we are taking the tough decisions needed to improve our operating margins in the near term and position ourselves for stronger growth when markets recover."
The group said underlying subscription-based revenue in Reuters Financial is now expected to grow by between 1 percent to 2 percent in the second half, compared to its July forecast of 3 percent.
Reuters also forecast in July that once-off revenue would grow by 10 percent in the second half, but it warned it was now unlikely to make that forecast as customers review their spending in the wake of the Sept 11 terrorist attacks on US cities.
Reuters also set itself a target to achieve double digit earnings growth and operating margins of 17 to 20 percent over the next five years.
Ingersoll-Rand to change incorporation to Bermuda
WOODCLIFF LAKE, N.J., Oct. 16 (UPI) -- Ingersoll-Rand Co., a leading diversified industrial firm, said its directors approved a plan to change its place of incorporation to Bermuda from New Jersey in part to reduce its worldwide tax rate.
The company, whose products include Bobcat construction vehicles, Schlage residential locks and Thermo King truck refrigeration units, said the change will also create a more favorable corporate structure for worldwide expansion of its current business and boost expected cash flow.
"Incorporation in Bermuda will enable IR to realize a variety of business, financial and strategic benefits," said Herbert L. Henkel, chairman, president and chief executive.
Under the plan, a newly formed Bermuda corporation--Ingersoll-Rand Company Limited--would become the parent company of Ingersoll-Rand Company.
All shares of Ingersoll-Rand common stock would be automatically converted into shares of the Bermuda company and the stock would continue to trade on the New York Stock Exchange under the same symbol.
The proposal is subject to approval by IR shareholders at a special meeting in mid-December. The company hopes to complete the conversion by year-end.
Ingersoll-Rand said the move, which will not affect day-to-day operations, has been planned for nearly a year. It plans to maintain its corporate headquarters in Woodcliff Lake, New Jersey.
Among the other companies that are incorporated in Bermuda but maintain U.S. headquarters is Tyco International Ltd., a diversified manufacturing and service company that makes undersea telecommunications systems, fire protection systems and specialty valves.
Cooper Industries Inc., which makes electrical products, tools and hardware, had proposed a move to Bermuda, but that was put on hold when Danaher Corp. made an unsolicited offer to buy the company.
Maytag posts loss
NEWTON, Iowa, Oct. 16 (UPI) -- Appliance maker Maytag Corp. posted a third quarter loss of $29.7 million, or 38 cents a share, compared with a net income of $59.5 million, or 74 cents a share during the same period last year.
Before special charges, earnings were $35 million, or 45 cents a share. Analysts on Wall Street had expected the company to post a net income of 40 cents a share, according to Thomson Financial/First Call. Maytag said in September that it would meet or beat Wall Street estimates due in part to better than expected results in its newly acquired Amana appliance unit.
The company said it took a third quarter charge of $59.5 million for the sale of its Blodgett commercial cooking products business and $5.2 million charge to retire some debt early.
Revenues rose 16 percent to $1.23 billion from $1.06 billion a year ago.
The company also said it expects to meet Wall Street earnings estimates for the fourth quarter.
Maytag said shipments of washers, dryers, dishwashers, refrigerators and ranges rose to a quarterly record, as it gained market share in that favorable environment and benefited from the addition of Amana.
The floor-care, vending and food-service equipment businesses were all down during the quarter, however, and the company's joint venture in China posted a loss.
Looking ahead, Maytag said it expects to meet Wall Street earnings estimates for the fourth quarter.
"In the fourth quarter, we will begin to fully integrate the recently acquired Amana business into our major appliance division, and the synergies generated will reduce our operating costs starting next year," said Chairman and Chief Executive Ralph Hake.
"We will also pursue cost reduction initiatives in our other businesses, and we expect to complete the sale of our Blodgett commercial cooking products business. If the industry and its orders hold at present levels for the rest of the year, Maytag will achieve the current analysts' earnings consensus in the fourth quarter," Hake added.
Analysts expect the company to post a net income of 42 cents a share in the fourth quarter, according to First Call.
