Here is a look at more of Tuesday's top business stories:
Peregrine Systems cuts 48 percent of staff
SAN DIEGO, June 18 (UPI) -- Peregrine Systems Inc., reeling from accounting and management turmoil that has depressed its stock and prompted it to restate revenue downward going back nearly three years, said it plans to cut its workforce by 48 percent in the next few weeks.
The company said it plans to reduce the number of its employees from about 2,900 to 1,500 after the previously planned divestiture of its Supply Chain Enablement business.
The software maker said it plans to streamline operations and reduce operating costs and expenses, including office consolidations and a reduction of its North American work force.
Peregrine is also reviewing consolidation of its operations outside of North America.
The initial North American work force reduction will include consolidation of numerous office locations, but it will have minimal impact on the company's Remedy business.
Earlier in June, Peregrine unveiled plans to operate the Remedy business as an independent unit.
Gary Greenfield, chief executive officer, said, "We've had to take difficult, but necessary, steps to reposition our company in line with current market conditions, and this work force reduction will help Peregrine sustain long-term viability."
In late May, Peregrine fired Auditor KPMG LLP, less than two months after hiring it as the company's outside auditor to replace beleaguered Arthur Andersen LLP.
Shortly after KPMG arrived on the job, Peregrine's new accountants had found that, beginning in 2000, Peregrine apparently overstated revenue by about $100 million, touching off an internal investigation and an inquiry by the Securities and Exchange Commission.
Following the disclosure, Peregrine restated its financial results from the fiscal years 2000 and 2001, and the nine months of fiscal 2002 ended Dec. 31, 2001.
Last month, the company said its restatement was the result of "revenue-recognition irregularities," and that it planned to cut costs, including resorting to layoffs, and pursue potential "financing alternatives."
The company also said about $35 million of the disputed revenue stemmed from transactions between Peregrine and what had been KPMG's consulting arm. KPMG Consulting became a separate company in 2001.
Earlier this month, Peregrine reshuffled its executive ranks by naming Gary Greenfield, formerly president and chief executive of Merant Plc, as chief executive.
Greenfield replaced Richard Nelson, who was acting chief executive. The company also said at the time that board member Rod Dammeyer, chairman of Peregrine's audit committee, resigned for personal reasons.
Earnings fall at Lehman Brothers
NEW YORK, June 18 (UPI) -- Lehman Brothers Holdings Inc., a leading Wall Street firm, said its second quarter net income dropped as weak stock trading and investment banking results overshadowed strength in bond operations.
Lehman said its net income for the second quarter ended May 31 dropped to $296 million, or $1.08 a share, from $430 million, or $1.38 a share during the same period last year.
Analysts on Wall Street had expected Lehman Brothers to post a net income of $1.05 a share, according to Thomson Financial/First Call.
Earnings per share calculations include the impact of a special preferred dividend of $25 million, compared with $50 million a year earlier.
Total revenue fell 31 percent to $4.35 billion from $6.28 billion a year ago.
Net revenue, which is total revenue minus interest expense, fell 18 percent to $1.66 billion from $2.02 billion a year ago.
As in the first quarter, revenue from merger-and-acquisition services was weak industrywide, Lehman said.
However, revenue from equity capital markets, while lower than a year earlier, increased 20 percent from the first quarter.
Richard S. Fuld Jr., chairman and chief executive officer, said, "We are pleased with our performance given the market environment."
Fuld said the bank has made strong market share gains in many investment banking products and had near record levels in fixed-income revenue.
Lehman's total assets on May 31 were $270 billion, up from $235.9 billion a year earlier.
Lee Enterprises lifts earnings outlook
DAVENPORT, Iowa, June 18 (UPI) -- Newspaper publisher Lee Enterprises Inc. said it expects its fiscal third quarter earnings to be "significantly higher" than the average Wall Street estimate, thanks to a reversal of part of a reserve set aside in a tax dispute.
The company said it has favorably resolved one element of a federal tax claim related to its 1997 sale of NAPP Systems Inc.
About $10 million, or 22 cents a share, of the amount reserved will be reversed and recorded in results from continuing operations for the third quarter, ending June 30, the company said.
Analysts on Wall Street had been expecting the company to post a net income of 42 cents a share, according to Thomson Financial/First Call.
Lee also said publishing revenue at properties owned at least one year rose 3.5 percent in May, with total advertising revenue up 4.7 percent.
Classified revenue declined 1.4 percent, led by a drop of 13.4 percent in employment advertising, while national advertising increased 2.1 percent.
Connetics sees revenues rising
PALO ALTO, Calif., June 18 (UPI) -- Connetics Corp., a maker of specialty pharmaceutical and dermatology products, said it expects strong demand for its scalp products to boost 2003 revenue by about 40 percent.
The company affirmed its full year 2002 product revenue estimate of $44 million to $46 million and said total revenue, including royalties and contract payments, will be $47 million to $49 million.
For 2003, Connetics projected product sales of $62 million to $65 million and total revenue of $65 million to $68 million.
The company also said it expects to become profitable in the second half of next year.
Analysts on Wall Street expect Connetics to post a 2003 loss of 40 cents a share.
The company cited continued positive prescription trends for its steroid-based scalp products, Olux and Luxiq, for the anticipated revenue gains in 2003.
