Corporate America Fights Back (Updated)
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- Hewlett-Packard Co. warned after the markets closed on Thursday that its earnings for its January fiscal quarter would come in below Wall Street expectations, citing a tough economic environment and weak buying by consumers and businesses.
- On the other hand, software maker Ariba Inc. said that first-quarter results beat Wall Street expectations. It also raised its forecasts for the second quarter and fiscal 2001.
- Delta Air Lines Inc. is the latest company to be slapped with a racial discrimination lawsuit. Three black employees charged that the Atlanta-based carrier denied blacks opportunities for promotion, and did not pay on a par with white workers. The suit seeks unspecified compensatory and punitive damages and other relief.
- Coca-Cola Co. has agreed to a puny deal with potentially large ramifications. It signed a letter of intent to acquire P.J. Bean Co., the maker of Planet Java coffee, expanding its portfolio of non-carbonated, according to The Wall Street Journal. Remember, the company recently announced plans to build of distribution of milk-based products. Terms couldn't be determined, but the deal is a very small one for Coke. Production of Planet Java bottled coffee amounted to only 100,000 eight-ounce cases last year.
- Starbucks Corp. Chairman Howard Schultz is leading a group buying the Seattle Supersonics basketball team from Ackerley Group Inc. for $200 million. The deal includes the Seattle Storm, the Sonics's sister franchise in the Women's National Basketball Association. The sale helps Ackerley pay down debt and focus on its outdoor media, television and radio broadcasting businesses while shedding the money-losing basketball franchise it bought in 1983 for $22 million in cash and other compensation. The deal will close during the first quarter of 2001.
- General Motors Corp. said it expects to save between $800 million and $1.2 billion on its materials bill this year through a new program under which it asks suppliers for ideas on how to save money and shares the proceeds with the supplier if the ideas are implemented, according to a wire report citing GM purchasing chief Harold Kutner.
- Turner Broadcasting Systems Inc. is selling its loss-plagued World Championship Wrestling operation to investment group Fusient Media Ventures for an undisclosed sum. The WCW lost an estimated $80 million last year.
- E*Trade Group Inc. said it has agreed to acquire LoansDirect, a mortgage originator, in an all-stock transaction. E*Trade didn't disclose terms of the deal but said Thursday it will add to earnings and revenue immediately. LoansDirect is a retail enterprise that provides an array of mortgage products directly to consumers via the Internet rather than branch offices.
- Waste Systems International Inc. filed for Chapter 11 bankruptcy protection from creditors after failing to make debt payments last week. The company provides waste collection, recycling and disposal services.
- Quaker Chairman and Chief Executive Robert S. Morrison could receive $19.25 million, as well as options for at least 600,000 PepsiCo common shares once PepsiCo Inc.'s proposed $13.77 billion acquisition of Quaker Oats Co. goes through, according to an SEC filing. Morrison was persuaded to remain with the combined company. The payout will be made within 30 days of either the first year- and-a-half of his initial employment with PepsiCo or after Morrison is fired involuntarily by PepsiCo or quits with good reason. If he voluntarily resigns, he will forfeit the $19.25 million payout.
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