Business Highlights

Business Highlights

	Published : Thu, 31 May 2007 23:35 By : Agencies Print this Story

DALLAS (AP) - Dell Inc. said Thursday that earnings fell slightly in preliminary first-quarter results, and the computer maker said it would lay off more than 8,000 employees over the next year as part of an ongoing restructuring.

Dell said it earned $759 million, or 34 cents per share, in the three months ended May 4. That compared with $762 million, or 33 cents per share, in the year-ago period.

First-quarter sales rose nearly 1 percent from the year ago period to $14.6 billion.

Analysts, on average, expected earnings of 26 cents per share on sales $13.95 billion, according to a poll by Thomson Financial.

In what has become a trend in recent quarters, Dell released the financial results as a news release and didn't offer any follow-up conference calls with analysts and reporters. The company didn't provide year-ago figures in its report.

Round Rock, Texas-based Dell's earnings statements from the second, third and fourth quarters also remain preliminary and have yet to be filed with the Securities and Exchange Commission because of an ongoing federal accounting probe that found numerous errors, evidence of misconduct and financial control deficiencies.

NEW YORK (AP) -- Stocks finished largely flat Thursday after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions. Technology stocks fared better than most, however.

The Commerce Department's latest estimate of first-quarter GDP was 0.6 percent, lower than the average economist estimate of 0.8 percent and the 1.3 percent the government projected in April.

First-quarter growth was the most sluggish since the last quarter of 2002, but the Dow Jones industrial average has nonetheless surged more than 9 percent this year, causing some investors to pause.

Most on Wall Street expect growth to pick up later in the year, and remain optimistic about the stock market, thanks to the unrelenting wave of takeovers, which are on track to beat last year's record tab of $4 trillion.

WASHINGTON (AP) -- Economic growth skidded to a near halt in the first quarter, with the worst showing in more than four years raising concerns about how long the country's sluggish spell will last.

The Commerce Department reported Thursday that gross domestic product increased by just a 0.6 percent pace in the January-through-March period, much weaker than estimated a month ago. Government statisticians slashed by more than half their first estimate of a 1.3 percent growth rate for the quarter.

The main forces behind the downgrade: the bloated trade deficit and businesses cutting investment for the supply of goods held in inventory.

What largely prevented the economy from going under: consumers, who showed an even bigger appetite to spend.

For nearly a year, the economy has been enduring a stretch of subpar economic growth due mostly to a housing slump.

CHARLOTTE, N.C. (AP) -- A little more than a year after acquiring one of the nation's top mortgage lenders, Wachovia said Thursday it would buy A.G. Edwards for $6.8 billion in a deal that will create the nation's second-largest retail brokerage.

It's the latest in a buying spree by Wachovia and retail banking rival Bank of America as they seek to expand their financial service businesses and add customers for a broad range of products, from traditional deposit accounts to home and auto loans to wealth management.

Charlotte, N.C.-based Wachovia Corp. was already a major player in the retail brokerage business, having combined its securities unit with that of Prudential Financial in 2003. Thursday's deal further solidifies the nation's fourth-largest bank as a top player in a competitive market, as regional securities dealers find themselves under pressure from larger rivals who can poach talent and better cope with falling commissions.

MINNEAPOLIS (AP) -- Northwest Airlines departed bankruptcy protection on Thursday, capping a 20-month reorganization aimed at making the nation's fifth-largest carrier competitive for years to come.

Northwest shares began trading on the New York Stock Exchange Thursday morning, with CEO Doug Steenland and other employees ringing the opening bell, marking the end of a wave of airline bankruptcies that began after the Sept. 11 attacks. The shares traded at $25.25 after being offered to unsecured creditors at $27.

Northwest has slashed debt by $4.2 billion, cut $400 million a year in the cost of its fleet, and trimmed unprofitable routes. It also cut $1.4 billion a year in labor costs.

The result is a slightly smaller, more efficient airline with some of the lowest costs among the major carriers.

ST. LOUIS (AP) -- The Justice Department on Thursday approved Monsanto Co.'s $1.5 billion acquisition of cotton company Delta and Pine Land Co., but required the companies to sell assets related to cottonseed production.

Assistant Attorney General Thomas Barnett said the divestiture is necessary to make sure the merger doesn't quash competition in the U.S. cottonseed market.

To make the deal possible, Monsanto and Delta created a new cottonseed company that Monsanto will sell to spur competition in the marketplace.

St. Louis-based Monsanto pitched in its Stoneville Pedigreed Seed Company, while Delta added some of its best cottonseed varieties to the new company, Barnett said. When it is purchased, the resulting firm should allow a competitor to develop new lines of genetically engineered cottonseed to compete with Monsanto's, Barnett said.

Monsanto said its competitor, Bayer CropScience, has agreed to buy the Stoneville holdings for $310 million.

LONDON (AP) -- GlaxoSmithKline PLC said Thursday that the U.S. Food and Drug Administration has declined to grant a priority review to its experimental cancer vaccine Cervarix, adding to pressure on the drug maker after a controversy emerged about its diabetes drug Avandia.

The FDA ruling means Cervarix will have to go through a standard 10-month review, instead of a fast-track process that would have accelerated the approval and marketing of the vaccine in the key U.S. market.

Glaxo now expects to get the drug, which targets cervical cancer and is expected to become a multibillion-dollar product, to market in the United States sometime in 2008.

The company applied for U.S. marketing approval in March, hoping to receive a 'priority review,' which the FDA grants to medicines that represent a significant improvement compared with existing therapies.

WASHINGTON (AP) -- Five companies -- AT&T, Level 3 Communications, Qwest Communications, Sprint Nextel and Verizon -- on Thursday were awarded a federal telecommunications contract worth up to $20 billion over 10 years.

The winners of the so-called Networx Enterprise contract must now compete with each other to win business from agencies looking to improve their voice, data and other telecom services.

It's the second telecom contract awarded by the General Services Administration in about two months.

In late March, Qwest Communications International Inc., AT&T Inc. and Verizon Communications Inc. were winners of the much larger Networx Universal contract, the government's largest telecom contract ever awarded. That deal is potentially worth up to $48 billion over a decade.

For Sprint -- the only bidder shut out from the Universal contract -- getting on the Enterprise contract was critical. The company had been providing telecom services to federal agencies for the last 18 years.

By The Associated Press

The Dow Jones industrial average slipped 5.44, or 0.04 percent, to 13,627.64, after reaching a new trading high of 13,673.07.

The Standard & Poor's 500 index advanced 0.39, or 0.03 percent, to 1,530.62, after soaring to a record close Wednesday for the first time since March 2000.

The technology-dominated Nasdaq composite index showed more pronounced movement, rising 11.93, or 0.46 percent, to 2,604.52.

Gas futures fell 2.13 cents to settle at $2.2512 on the New York Mercantile Exchange.

Also on the Nymex, light, sweet crude for July delivery rose 52 cents to settle at $64.01 a barrel, though the contract had traded lower for much of the day.

July Brent crude rose 20 cents to settle at $68.04 a barrel on the ICE Futures exchange in London.

Heating oil futures rose 0.72 cent to settle at $1.8827 a gallon on the Nymex, while natural gas prices settled 0.6 cent lower at $7.935 per 1,000 cubic feet.