Here is a look at more of Friday's top business stories:
Losses narrow at UAL
CHICAGO, Oct. 18 (UPI) -- UAL Corp., parent of United Airlines, said its third-quarter losses narrowed to $889 million, or $15.57 a share, from a net loss of $1.2 billion, or $21.43 a share during the same period last year.
UAL reported a third-quarter operating loss of $503 million, or $8.82 a share, compared with an operating loss of $542 million, or $10.05 a share, a year earlier.
Analysts on Wall Street had expected UAL to post a loss of $7.42 a share, according to Thomson First Call.
Revenue declined to $3.74 billion from $4.11 billion a year ago.
UAL said its "single-minded" pursuit is executing a turnaround without seeking Chapter 11 bankruptcy protection.
"At this point nobody should consider a Chapter 11 filing inevitable," Chairman, President and Chief Executive Glenn F. Tilton said.
The parent of the nation's second largest carrier said discussions with various labor unions are moving ahead at "varying" paces. UAL has been in negotiations with the unions as part of its plan to slash labor costs by $5.8 billion over a nearly five-year period.
UAL said it expects to file an updated business plan next week with the Air Transportation Stabilization Board, which governs a $10 billion loan-guarantee program for airlines.
The update will offer details on the company's talks with labor groups, lenders and suppliers and outline a plan to improve non-labor costs and revenue. UAL said it believes its documentation will strongly make the case that it should receive federal loan guarantees. The company said the plan also will demonstrate its ability to return to financial health and profitability.
The company in June applied for a $1.8 billion federal guarantee to back a private $2 billion loan. But the board indicated that the expense savings in the airline's initial business plan were inadequate, and sent UAL back to seek more cuts from its employees and suppliers.
The company said a team of senior management representatives developed a plan to achieve at least $1.4 billion in annual revenue and non-labor expense improvements.
UAL said it ended the quarter with a cash balance of $2 billion, which includes $344 million in restricted cash.
UAL has warned that it will face a liquidity crunch if it does not gain access to fresh capital. The company owes $945 million in debt repayments in November and December, and is scheduled to make more than $40 million in interest payments on two series of debentures Nov. 1.
The company's cash burn rate surged to $7 million a day, up from less than $1 million a day in the second quarter and less than $5 million a day in the first quarter.
UAL warned that it will eat up even more cash per day in the fourth quarter in light of seasonal trends and continuing weakness in the industry.
UAL also confirmed that it expects to report a significant loss in the fourth quarter and full year. The company didn't offer specific estimates. UAL previously canceled a conference call originally set for Friday, saying a call would be scheduled when it will be able to discuss details of its financial recovery plan.
Bookings for October are comparable to those seen in October 2000. The company isn't using 2001 figures because of the effects the Sept. 11 attacks had on bookings.
November's booked load factor is several points behind that of November 2000, while December is about one point lower.
UAL said it hedged about 36 percent of the fuel it expects to use in the fourth quarter, a move that it predicts will save about $26 million.
The company also said it expects 2002 capital spending to total $1.1 billion, which is $100 million less than its previous estimate. UAL cut non-aircraft capital spending for the second half of the year.
The company won't spend any capital on aircraft next year because it deferred orders for new planes.
For the fourth quarter, the company expects a 5 percent increase in available seat miles and in operating costs per available seat mile.
During the third quarter, traffic fell 4.5 percent to 30.03 billion revenue passenger miles. A revenue passenger mile represents one paying passenger flown 1 mile.
Load factor, or percentage of seats filled, edged up to 75.4 percent from 73.1 percent a year earlier.
Earnings decline at Merck & Co.
WHITEHOUSE STATION, N.J., Oct. 18 (UPI) -- Merck & Co. Inc., the world's third-largest drugmaker, reported a decline in its third-quarter earnings, hurt by sluggish sales of arthritis treatment Vioxx and falling sales of drugs facing generic competition.
Merck, a component of the Dow Jones industrial average, said its net income declined to $1.88 billion, or 83 cents a share, from $1.95 billion, or 84 cents a share during the same period last year.
Analysts on Wall Street had expected the company to post a net income of 83 cents a share, according to Thomson First Call.
Sales rose 8 percent to $12.9 billion.
Merck cut its 2002 sales estimates for Zocor, Singulair, Vioxx and Arcoxia, as well as for Cozaar and Hyzaar.
The company now expects 2002 Zocor sales of $5.6 billion to $5.8 billion, down from a previous view of $7.1 billion to $7.4 billion given in July.
Merck now expects Vioxx and Arcoxia sales to total $2.6 billion to $2.8 billion, which is below its previous projection of $2.8 billion to $3.1 billion.
Singulair sales are expected to come in at $1.4 billion to $1.6 billion, which is also below a previous estimate of $1.6 billion to $1.8 billion.
Merck expects sales of Cozaar and Hyzaar to total $2.1 billion to $2.3 billion in 2002, down from a previous projection of $2.2 billion to $2.5 billion.
The company narrowed its sales range for Fosamax to $2 billion to $2.2 billion, compared to a previous estimate of $2 billion to $2.3 billion.
Merck reiterated that it expects 2002 earnings per share, on an as-reported basis, to be at the same level as the $3.14 a share reported in 2001.
The company also reiterated that it expects its core pharmaceutical business to deliver double-digit earnings-per-share growth in 2003.
Merck announced it is increasing the level of detail it provides to investors about its results by reporting sales for its major individual products on a net basis.
Merck, which receives supply payments on the U.S. sales of certain products by AstraZeneca Plc, most notably Prilosec and Nexium, expects total payments to drop in 2002.
The decline stems from the U.S. product patent on Prilosec expiring in 2001. This guidance has not changed as a result of the recent court decision with respect to AstraZeneca's omeprazole patents, Merck said.
Last week, a U.S. District Court found that generic drug maker Andrx Group and two others have infringed on the patents AstraZeneca holds on Prilosec.
Merck expects marketing and administrative costs for 2002 to be at the same level as the $6.22 billion spent in full-year 2001.
Research and development costs in 2002 are estimated to be $2.7 billion to $2.8 billion, compared to $2.46 billion spent in 2001.