Here is a look at more of Thursday's top business stories:
S&P: Insurance premiums to continue to rise
NEW YORK, May 16 (UPI) -- Standard & Poor's Corp. said commercial and casualty insurance premiums over the past seven months have risen by 10 to over 300 percent in some cases, and the rating agency expects the rates to continue to rise through the remainder of the year.
S&P noted that while the events of Sept. 11 accelerated the increase in U.S. commercial real estate insurance premiums, property and casualty insurance costs had already begun rising in 2000, independent of terrorism-coverage costs.
Don Watson, a managing director in S&P's corporate insurance group, said, "What is driving this rise in rates is a shrinkage in capacity; the supply has declined."
A year ago, because of the relatively soft market, there were several underwriters that were willing to provide $200 million, and more in some cases, in coverage on a single property.
Now, it is difficult for large urban commercial properties to find coverage of over $25 million from a single source.
"There is a finite number of companies that could underwrite this business; there is also a finite number that believe solid returns are still possible given the risk of terrorism," Watson said.
"Yes, you could still put together a package, but it is challenging; it takes longer. Furthermore, the package costs more and requires higher deductibles, greater co-insurance, and frequently less coverage," he said.
S&P said it has been estimated that claims resulting from the attacks will cost the insurance industry in excess of $30 billion dollars.
"As a result of Sept. 11, insurers have revisited their worst-case scenarios to measure the severity of risk, but when it comes to terrorism risk, the reality is that you cannot measure the probability of its occurrence. Consequently, insurers have reduced the overall amount of insurance coverage they are willing to offer in order to limit their exposure to greater losses against their capital base," Watson said.
Earnings fall 22 percent at Hormel Foods
AUSTIN, Minn., May 16 (UPI) -- Hormel Foods Corp. said its second quarter net income for the period ended April 27 fell 22 percent to $32.7 million, or 23 cents a share, from $38.9 million, or 28 cents during the same period last year.
The company last month lowered earnings outlook for the quarter to 20 cents to 24 cents a share, from a prior 30 cents to 34 cents.
Analysts on Wall Street lowered their expectations to 22 cents from a prior 31 cents, according to Thomson Financial/First Call.
The maker of Spam luncheon meat and Jennie-O turkey said its revenue fell to $954.6 million from $961.8 million a year ago.
Joel W. Johnson, chairman, president and chief executive officer said, "The industry faced aggressive retail promotions resulting from the protein oversupply created by the Russian ban on poultry imports.
"Even though the performances of our grocery products reporting segment and the foodservice and meat products business units of the refrigerated foods reporting segment were strong, they were not able to offset the effect the Russian ban had on the market," Johnson said.
"Two of our key growth initiatives, ethnic foods and Hormel HealthLabs, continued to show healthy growth. Jennie-O Turkey Store's second quarter results were accretive and would have been even better if not for the effects of the Russian ban. Despite the near-term difficulties caused by this unexpected market condition, Hormel Foods is maintaining aggressive marketing support for its branded, value-added products," Johnson added.
Earnings plunge 82 percent at Mesaba Holdings
MINNEAPOLIS, May 16 (UPI) -- Mesaba Holdings Inc. said its fourth quarter net income plunged 82 percent, hurt by a fall in travel after the Sept. 11 attacks.
Mesaba, a regional affiliate of Northwest Airlines Corp., said its net income sank to $177,000, or 1 cent a share, from $986,000, or 5 cents a share during the same period a year earlier.
Operating revenue fell 8 percent to $102.2 million from $111.3 million as a result of the ongoing impact of the terrorist attacks and economic recession.
The company said its fourth quarter results were in line with its guidance of near break-even results issued last quarter and with current consensus estimates.
Unit revenues increased to 15.6 cents per available seat mile (ASM) as compared with 15.1 cents per ASM a year earlier due to the strong operating performance and increased ground-handling activity.
Paul F. Foley, president and chief executive officer, said, "Despite the tumultuous forces affecting the industry and the company in the second half of fiscal 2002, we continue to improve our operating performance.
"For instance, Mesaba's completion factor and arrival within 14 minutes metrics rose for both the fourth quarter and fiscal year. In fact, Mesaba's performance on these metrics consistently lead the industry," Foley said.
Looking ahead, the company expects fiscal 2003 earnings of 15 cents to 25 cents a diluted share. It predicted a rebound in available seat miles after hitting a low in the third quarter.
Mesaba Airlines operates as a Northwest Jet Airlink under code-sharing agreements with Northwest Airlines. Currently, the airline serves 102 cities in 25 states and Canada from Northwest's and Mesaba's three major hubs, Detroit, Minneapolis/St. Paul and Memphis.
Results fall 18 percent at American Eagle Outfitters
WARRENDALE, Pa., May 16 (UPI) -- Youth-oriented apparel chain American Eagle Outfitters Inc. said its first quarter net income fell 18 percent as higher costs offset higher sales.
American Eagle said its net income fell to $12.7 million, or 17 cents a diluted share, from $15.5 million, or 21 cents a share during the same period last year.
Analysts on Wall Street had expected the retailer to post a net income of 16 cents a share, according to Thomson Financial/First Call.
The retailer said its sales for the quarter rose 10.5 percent to $277.9 million from $251.5 million a year ago.
Sales at stores open at least a year, or same-store sales, fell 6.1 percent.
American Eagle Outfitters currently operates 646 stores in 48 states and the District of Columbia.
Earnings rise at Children's Place Retail Stores
SECAUCUS, N.J., May 16 (UPI) -- Children's Place Retail Stores Inc. said its first quarter net income rose 19 percent to $15.2 million, or 56 cents a share, from $12.8 million, or 48 cents a share during the same period last year.
Analysts on Wall Street had expected the company to post a net income of 55 cents a share, according to Thomson Financial/First Call.
Sales rose 8 percent to $173 million, while sales at stores open at least a year fell 11 percent.
Ezra Dabah, chairman and chief executive officer, said, "We are pleased with the results of the first quarter 2002, as we posted a record operating margin in a difficult retail environment."
"Looking ahead, due to our sales trends, we are reducing our revenue projections for the full year. However, given our anticipated improvement in gross margin, along with tighter management of our operating expenses, we remain comfortable with our previously stated 25 percent earnings per share increase for 2002 versus last year," Dabah said.
Green Mountain Coffee posts higher results
WATERBURY, Vt., May 16 (UPI) -- Specialty coffee roaster Green Mountain Coffee Inc. said its second quarter net income for the period ended April 13 rose 9 percent as its expansion into supermarkets and convenience stores helped offset sluggish sales growth and higher expenses.
Green Mountain said its net income rose to $1.3 million, or 18 cents a share, from $1.2 million, or 17 cents a share during the same period last year.
Net sales rose to $23 million from $22 million a year ago.
Looking ahead, the company said it expects full fiscal year earnings per share of 94 cents to 97 cents. For the third quarter it projected 19 cents to 21 cents.
The company said its full-year profit will be reduced by 4 cents to 6 cents a share as a result of the equity accounting method for its Keurig investment.