Friday, March 19, 2004

Business digest

Kmart sees profit, but sales still falling

DETROIT - Kmart Holding Corp. announced the discount retailer's first profitable quarter in three years, but same-store sales continued to fall - an apparent sign that post-bankruptcy changes have failed to impress customers.

The company, which had earlier announced a profitable holiday season, said Thursday that it earned $276 million, or $2.78 per share in the fourth quarter. For the same quarter a year ago, while it was in bankruptcy and before its reorganization, it reported a loss of $1.1 billion.

Fourth-quarter sales at stores open at least a year declined 13.5 percent, while total sales dropped 25.8 percent.

Shell reclassifies oil, natural gas reserves

LONDON - The Royal Dutch/Shell Group of Cos. suffered another blow to its reputation Thursday when it announced additional cuts to its estimated reserves of oil and natural gas and suggested that more reductions might follow.

Shell downgraded 250 million barrels in reserves to other, less certain categories. At the same time, it decided not to book a separate batch of 220 million barrels that it had earlier considered worthy of classifying as reserves.

The company postponed the release of its annual report by about two months to give independent auditors enough time to complete a review of all the company's reserves.

Indictments sought in Parmalat fraud case

ROME - Prosecutors investigating the Parmalat scandal asked a judge Thursday to put the dairy giant's founder and 28 other people on trial for their alleged roles in the fraud.

Court officials said prosecutors are seeking indictments against Parmalat founder Calisto Tanzi, who has been in jail since his arrest on Dec. 27; his son Stefano, who served on the board of Parmalat and in other family activities, and other former board members.

The Italian news agencies ANSA, AGI and Apcom said the indictment requests also targeted three former officials at Bank of America, as well as the bank itself and the two companies which audited Parmalat books, Deloitte & Touche SpA and the former Italian branch of Grant Thornton.

The Milan prosecutors who issued the requests suspect the former Parmalat executives, auditors and bankers falsified accounts, misled the market and artificially boosted the dairy company's share price over the years.

Enron exec paid attorneys $23 million

HOUSTON - Attorneys in the case against Enron Corp.'s former chief executive, Jeffrey Skilling, reportedly received $23 million for his defense before the government froze the assets of the highest-ranking former company executive indicted so far in the scandal, according to court filings.

Law professors and other experts were surprised at the hefty fees that were paid before a federal judge froze about $55 million of Skilling's assets.

Skilling, 50, faces 35 felony counts of conspiracy to commit fraud, securities fraud, wire fraud, making false statements to auditors and insider trading.

McDonald's changing Happy Meals food

OAK BROOK, Ill. - McDonald's Corp. will add menu choices and change the packaging for its Happy Meal as part of a global marketing campaign.

In the United States, the Oak Brook-based company will add 1 percent milk and Apple Dippers to its Happy Meal menu. Elsewhere, the changes include menu additions such as fruit cups in Italy and Dannon lowfat yogurt in Spain.

30-year mortgage rates nearing record lows

WASHINGTON - Mortgage rates fell again this week, with the benchmark 30-year mortgages approaching last year's rates, which were the lowest in more than four decades. Rates for one-year adjustable mortgages set a new record low.

The average rate on 30-year, fixed-rate mortgages dipped to 5.38 percent, mortgage giant Freddie Mac reported Thursday in its weekly nationwide survey of mortgage rates.

This week's rate was down from 5.41 percent last week and marked the lowest level for 30-year mortgages since the week ending June 27, when rates averaged 5.24 percent. The low point for 30-year mortgages since the early 1960s was 5.21 percent, reached in mid-June of last year.

From wire reports

Behind the Milacron deal
New focus warms things up at business incubator
Stewart asks friends to write judge
EU plans sanctions against Microsoft
France wooing tourists back
Low interest rates have consumers piling on debt
Jobless claims continue down
Jurors in 5-month Tyco trial begin deliberations
United delays Chapter 11 exit
Tristate summary
Business digest