Thursday, January 22, 2004

Business Digest



From staff and wire reports

Earnings forecast hurts Convergys shares

Shares of Cincinnati's Convergys Corp. slipped about 6 percent Wednesday, closing at $18.35, down $1.13, as investors were apparently concerned over lower earnings expectations for the current quarter.

In reporting fourth-quarter and year-end results late Tuesday, the billing and customer care provider said earnings for the March quarter, typically its weakest, will be in the range of 20 to 22 cents a share. Analysts had expected 25 cents. The company said its billing business faces stiff pricing pressure.

Kroger under attack in union strategy

The powerful AFL-CIO labor union called this week for its members to implement a broader attack against three big supermarket chains locked in a bitter strike with Southern California grocery clerks.

The plan, worked out between the AFL-CIO and the United Food and Commercial Workers union, focuses on attacking the parent companies of Albertson's, Vons and Ralphs in their markets elsewhere.

Ralphs' parent, Kroger Co., is based in Cincinnati.

Other elements include wider use of informational pickets outside California, town hall meetings, demonstrations at the homes of company executives and pressuring big investors to punish the companies by selling off their shares.

American Airlines operator reduces loss

FORT WORTH, Texas - AMR Corp., the parent of American Airlines, said Wednesday it lost $111 million in the last three months of 2003 - a much smaller loss than it suffered a year ago - as it cut costs and posted a modest gain in revenue.

The world's largest airline said its net loss in the quarter ended Dec. 31 was 70 cents per share, compared with a loss of $529 million, or $3.39 per share in the same period of 2002.

Analysts surveyed by Thomson First Call had expected the company to lose $1.01 per share.

United Airlines staff balks at pay cutback

UAL Corp.'s United Airlines flight attendants union is refusing to sign a contract approved in April that cut pay by 9 percent because the company has announced plans to reduce retiree health benefits.

The Association of Flight Attendants said it will fight the retiree cuts in UAL's bankruptcy proceeding or in other court actions. The Chicago-based airline promised employees who retired by July 1 a certain level of benefits, and more than 2,500 accepted the offer, the union said.

The contract is legal regardless of whether the union signs it, United spokeswoman Jean Medina said.

UAL, the world's second-largest airline company, filed for bankruptcy protection in December 2002 and sought to reduce labor costs by $2.56 billion annually.

Swiss exchange adds two Adecco probes

ZURICH, Switzerland - The Swiss Stock Exchange has started two investigations of the global employment agency Adecco, which has been hit by an accounting scandal and is already being investigated by banking regulators here and authorities in the United States.

The probes - focusing on possible insider trading and a possible breach of the exchange's rules on announcing potentially market-moving news - were launched Tuesday.

Adecco revealed earlier this month accounting flaws in its U.S. operations.

Saudi minister predicts rise in oil prices

DAVOS, Switzerland - Saudi Arabia would like to see the price of oil remain constant at $25 a barrel but its oil minister said Wednesday it would "be a miracle" if that happens.

The Organization of Petroleum Exporting Countries made no change in its desired price range of $22 to $28 per barrel in December but prices have surged to around $31 because of tight supplies and the cold winter in the United States.

Saudi oil minister Ali Naimi told reporters at the World Economic Forum that there are enough supplies of oil in the market.

Stressing that the price range is a goal, he said OPEC is supposed to increase or decrease capacity by 500,000 barrels per day if prices shoot up or drop below the range for 20 days.

"But OPEC didn't do that. Actually OPEC put in 1.5 million (barrels). ... It's not a question of supply," Naimi said.

CORRECTION

Formica pension underpaid $500K

Total pension underpayments to Formica Corp. retirees amount to about $500,000. The figure was wrong in an article in Wednesday's Business section.




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