Executive Business Briefing

Aug. 28, 2002 at 9:33 AM
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Here is a look at more of Wednesday's top business stories:

Mesaba Aviation furloughs 50 pilots

MINNEAPOLIS, Aug. 28 (UPI) -- Mesaba Aviation Inc., said it plans to furlough approximately 50 pilots by January and close its flight crew bases in Wausau and Rhinelander, Wis., by Dec. 31 in an attempt to reduce costs.

The airline also said it expects to see decreased passenger loads and lower aircraft usage in the fall.

John Spanjers, chief operating officer and vice president of flight operations, said, "We regret the need to make these decisions, but they are necessary given the current economic realities of the airline industry.

"The reduced fall flight activity reflects the continued softness in passenger demand," Spanjers said.

Mesaba operates as a Northwest Jetlink and Airlink partner under service agreements with Northwest Airlines.

The airline serves 103 cities in 26 states and Canada from Northwest's and Mesaba's three major hubs, Detroit, Minneapolis/St. Paul, and Memphis.

Office Depot sees lower sales

DELRAY BEACH, Fla., Aug. 28 (UPI) -- Office Depot Inc. said it expects sales at its North American stores open for at least a year to fall in the low single digits on a percentage basis in the third quarter.

The office supply retailer said back-to-school sales are slightly lower so far and below the company's expectations.

But cost controls are helping boost margins and the company said it is comfortable with analysts' estimates of earnings of 27 cents a share in the third quarter.

Company-wide sales are expected to grow in the low-to-mid single digit range percentage range for the third quarter, the company said.

The company also backed full-year earnings consensus of $1.01 a share, up 44 percent from a year ago, but down 1 cent a share from the consensus estimate when the company reported second-quarter earnings on July 17.

Bruce Nelson, chairman and chief executive officer, said, "While total overall comparable North American sales continue to be impacted by the sluggish economic environment, we are still comfortable with current earnings consensus of 27 cents per share for the third quarter, a 35 percent increase over the 20 cents per share we reported for the third quarter last year.

"While sales remain soft, our gross margin improvement and cost control programs have allowed us to remain comfortable with our earnings outlook for the third quarter," he added.

Office Depot currently operates 853 office supply stores in the United States and Canada.

Losses narrow at Finlay

NEW YORK, Aug. 28 (UPI) -- Jewelry retailer Finlay Enterprises Inc. said its second-quarter losses narrowed to $473,000, or 5 cents a diluted share, from a net loss of $1.06 million, or 10 cents a diluted share during the same period last year.

Finlay, an operator of leased jewelry departments in department stores, said its net sales declined 5 percent to $187.1 million from $196.2 million a year ago.

Sales in its departments open at least one year inched up 0.3 percent.

The company said in July it expected its quarterly loss to be at the narrower end of a forecast range of 8 cents to 10 cents a share.

Arthur E. Reiner, chairman and chief executive officer, said, "We are pleased with our results for the second quarter and to have exceeded our original top and bottom line projections. Our company continues to demonstrate strong operating discipline, which enabled us to achieve improved profitability during the first half of the year."

Looking ahead Reiner said, "As we anniversary the tragedy of Sept. 11, it is difficult to predict the trend of our business compared to last year's results. Although recent business conditions have been difficult, we remain cautiously optimistic, but comfortable, with our fiscal 2002 earnings expectations of $2.35 to $2.50 per diluted share."

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