Executive Business Briefing

April 19, 2002 at 9:29 AM
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Here is a look at more of Friday's top business stories:

International Paper posts profit

STAMFORD, Conn., April 19 (UPI) -- International Paper Co., the world's largest forest products company said it posted a first quarter net income of $65 million, or 13 cents a share, compared with a net loss of $44 million, or 9 cents a share during the same period a year ago.

Excluding the special items, the company said it posted a profit of 12 cents a share.

On that basis, Analysts on Wall Street had expected the company to post a net income of 7 cents a share, according to research firm Thomson Financial/First Call.

Net sales declined to $6 billion from $6.9 billion for the same period a year ago and $6.3 billion in the fourth quarter of last year.

John Dillon, chairman and chief executive officer, said, "We completed the first quarter with strong momentum, and we continue to improve our underlying cost structure in a difficult macro environment.

"Our internal programs are having a major impact on our earnings, we have continued to match our production with our customers' demand, and we have delivered on our commitment to sell businesses that do not meet our long-term goals. Our inventories have been significantly reduced from last year's levels, and we have now divested more than $3 billion worth of assets. When the economic rebound does occur, we are very well positioned to take advantage of it," Dillon said.

The company said first quarter earnings for its Printing Papers unit fell to $76 million from fourth quarter earnings of $119 million as demand continued to weaken and prices remained under pressure for market pulp.

Industrial and Consumer Packaging earnings eased to $128 million from $129 million in the fourth quarter.

First quarter Forest Products earnings rose to $176 million from $153 million in the fourth quarter due to higher lumber and plywood prices.

Earnings rise at BellSouth

ATLANTA, April 19 (UPI) -- BellSouth Corp., the nation's third largest local telephone company, said its first quarter net income rose to $1.16 billion, or 61 cents a share, from $891 million, or 47 cents a share during the same period a year earlier.

Excluding a gain from the sale of KPN stock and charges related to a Qwest stock sale, Brazil loan impairments, foreign exchange impacts and unbilled receivable adjustments, the compnay said its net income for the period was 54 cents a share.

BellSouth, the dominant local telephone company in nine Southeastern states from Kentucky to Florida, said its revenue, including revenue from its Cingular Wireless joint venture, fell 1.1 percent to $7.08 billion.

Analysts on Wall Street had expected the company to post a net income of 56 cents a share, according to Thomson Financial/First Call.

Wall Street was also expecting revenue of $7.24 billion.

The telecommunications giant said its results continue to be negatively impacted by weak economic conditions in North American and Latin American markets, made worse by business failures in the telecommunications industry.

Chairman and Chief Executive Officer F. Duane Ackerman, said, "Our service levels are at all-time highs and our retention rate for small business customers is improving. We expect to begin adding long distance to our offers in the second quarter of 2002 and anticipate offering long distance service in all of our markets by year end."

The company said its Communications Group data service revenues rose nearly 15 percent to $1.12 billion from $975 million a year ago.

Sales of wholesale data transport services to other communications providers, including long distance companies and CLECs, were weak, growing at approximately 7 percent during the quarter. In contrast, all other data service revenues grew at a rate of 23 percent.

BellSouth said it added 108,000 Broadband DSL customers in the first three months of 2002, and had 729,000 retail and wholesale DSL customers at March 31, an annual growth rate of 141 percent.

BellSouth's domestic wireless revenues in the first quarter of 2002 were $1.4 billion, representing the company's 40 percent share of Cingular Wireless. This is a gain of 8.2 percent compared to the same quarter a year ago.

BellSouth's share of Cingular operating income was $266 million in the quarter, 29.8 percent higher than the same three months a year ago.

Cingular added 533,000 net digital postpaid contract customers in the first quarter and ended the quarter with 21.8 million total customers, an annual growth rate of 6.3 percent.

Looking ahead for the year, the company said it expects to report earnings of $2.35 to $2.43 a share. Analysts on Wall Street are expecting earnings of $2.40 a share.

Losses widen at UAL

CHICAGO, April 19 (UPI) -- UAL Corp., parent of United Airlines, said its first quarter losses widened to $510 million, or $9.22 a share, from a loss of $313 million, or $5.97 a share during the same period a year earlier.

Excluding certain items, UAL's loss was $487 million or $8.81 a share.

Analysts on Wall Street had expected UAL to post a loss of $10.24 a share, according to Thomson Financial/First Call.

UAL, which posted an airline industry record loss of $2.1 billion for all of 2001, said its revenue declined 25 percent to $3.29 billion from $4.42 billion a year ago.

Load factor for the quarter was 72.2 percent, on a 19 percent decline in capacity, a 3.9 point increase over the first quarter of last year.

John W. Creighton, chief executive officer, said, "We certainly are seeing signs that our industry's situation is beginning to improve, but there still is a long way to go. When I came to United last October, we focused on getting the airline back on the road to financial stability.

"It was my hope that we could put in place a four-plank recovery plan as soon as possible, and we have definitely made progress. We've reduced our operating and capital budgets in every way possible, boosted our cash position and we are focused on generating revenue with all means available to us," Creighton said.

"However, complications with negotiating open labor contracts have impeded our progress on reducing salary and other operating costs. Even though this has slowed us down, we will continue working to get our costs in line with our revenues," he said.

United and the International Association of Machinists (IAM) District 141M on Feb. 18 reached tentative agreement on a contract for the airline's mechanics, utility workers and related employees.

After reviewing the proposal, IAM 141M's membership voted to accept the agreement, ending more than two years of contract negotiations and averting the possibility of a strike.

Ford moves Lincoln Mercury to NA unit

DEARBORN, Mich., April 19 (UPI) -- Ford Motor Co. said that Wolfgang Reitzle, group vice president of its Premier Automotive Group, has agreed to become chief executive of Linde AG, a German engineering company.

Ford said Reitzle will continue to assist the company as a consultant on product, design and marketing-related issues. The move is effective May 1. Reitzle joined Ford in 1999 after 23 years with BMW AG.

The world's second largest automaker also said it plans to reorganize its luxury lineup, moving the Lincoln and Mercury brands into the company's North American Consumer Business Group.

Volvo, Aston Martin, Jaguar and Land Rover will continue to operate as part of the company's Premier Automotive Group.

Mark Fields was named group vice president, Premier Automotive Group, effective July 1. Fields, a representative director, president and chief executive of Mazda Motor Corp. and Ford vice president, replaces Reitzle.

Jim O'Connor was named Ford's group vice president for North American Marketing Sales and Service, overseeing Ford and Lincoln Mercury. O'Connor had been president of Ford Division.

Ford also named Steve Lyons, previously Ford Division general sales manager, a Ford vice president and president of Ford Division.

Kathleen Ligocki was named vice president for North American Marketing.

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