Thursday, April 24, 2003

Business digest

Banker charged with destroying evidence

NEW YORK - Frank Quattrone, a former star investment banker with Credit Suisse First Boston, was arrested and charged Wednesday with witness tampering and obstructing federal criminal and civil securities probes by directing the destruction of evidence.

The complaint said he directed CSFB's officers and employees to destroy evidence required to be produced for investigations by a federal grand jury and the Securities and Exchange Commission.

Quattrone resigned from CSFB in early March. During the dot-com boom of the late 1990s, he earned almost $100 million a year and wielded enormous influence at the helm of CSFB's technology unit. He presided over lucrative initial public offerings of companies such as and Netscape Communications Corp.

Kmart has date to shed bankruptcy protection

TROY, Mich. - Kmart Corp. won court approval late Wednesday to shed $7.8 billion in debt and emerge from bankruptcy.

Kmart, which filed for Chapter 11 in January 2002, expects to be profitable in 2004.

The plan approved by a U.S. Bankruptcy judge will let Kmart conclude the largest retail bankruptcy in U.S. history by May 5. The debt is being converted into new shares, which will transfer ownership to its creditors.

Existing shares will become worthless

GE shareholders reject exec-pay reviews

CHARLOTTE, N.C. - General Electric Co. shareholders turned back proposals Wednesday that would have subjected executive compensation at the company to closer scrutiny.

Supporters had not expected any of the nonbinding measures to pass, and only two - calling for shareholder review of executive severance packages and of any "poison pill" agreements the company may have - came close to approval.

American Airlines' top job in jeopardy

FORT WORTH, Texas - Struggling to regain control of a tumultuous labor situation and ward off bankruptcy, American Airlines Wednesday reported a $1.04 billion first quarter loss.

The labor unrest and financial distress add to pressure on the board to remove chairman and chief executive Donald Carty, analysts said. The board is to meet today.

Workers and union leaders remain outraged after learning late last week that while they were asked to accept cuts, American approved protected executive bonuses and pension payments.

AT&T beats forecast with quarterly earnings

NEW YORK - Cost-cutting allowed AT&T Corp. to surprise Wall Street Wednesday with a sizable first-quarter profit, but competition in the long-distance market continued to depress sales.

The nation's largest long-distance company earned $571 million, or 73 cents a share, in the quarter ended March 31. Excluding a gain of $42 million due to an accounting change, AT&T earned 67 cents a share, handily beating the average of 52 cents expected by Wall Street analysts, according to a survey by Thomson First Call.

Investors bid up value of Ebay shares

SAN JOSE, Calif. - Shares of EBay Inc., the world's largest Internet auctioneer, rose to a three-year high after first-quarter profit more than doubled and the company raised its sales and earnings forecasts.

EBay Wednesday reported net income surged to $104.2 million, or 32 cents a share, from $47.6 million, or 17 cents a share, a year earlier. Revenue rose 94 percent to $476.5 million, driven by increased international business and by PayPal, a payment-transfer business.

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Business digest
Morning memo
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