Dell, the world's largest personal computer maker, said fourth-quarter profit dropped 11 percent because of tax costs. For the three months ended Jan. 28, the company reported earnings of $667 million, down from $749 million in the comparable period a year earlier. Sales rose 17 percent, to $13.46 billion, short of Dell's $13.5 billion forecast. The quarterly results, released after financial markets closed, included a tax charge of 11 cents per share, which Dell said it took in anticipation of bringing home $4.1 billion in foreign earnings. The Texas company will be taxed on those earnings, although under a special one-year exemption passed by Congress last year, it will pay 5.25 percent instead of the usual rate of 35 percent on income earned in the United States. For the full year, Dell said it earned $3.04 billion, compared with $2.65 billion in 2003. Revenue rose to $49.21 billion from $41.44 billion.
No Dismissal of IBM Copyright Suit
A federal judge in Salt Lake City rejected efforts by International Business Machines to dismiss a major portion of SCO Group's $5 billion lawsuit accusing the computer giant of copyright infringement. IBM asked District Judge Dale A. Kimball in September to declare that its use of the freely distributed Linux operating system had not infringed on SCO's purported Unix copyrights. In his ruling, Kimball cited several Linux-related statements made to the court in 2003 in which SCO officials complained that there were many instances in which the company's "proprietary software has simply been copied and pasted." But he also said IBM could renew its dismissal bid after all the evidence has been gathered.
Sara Lee announced plans to sell or spin off businesses accounting for 40 percent of its revenue, including the apparel business that includes the Hanes and Playtex brands. It also named Brenda C. Barnes, left, chief executive officer. Barnes replaces C. Steven McMillan, who will remain chairman until he retires in October.
(Chris Kleponis -- Bloomberg News)
Mortgage rates fell. Rates for 30-year, fixed-rate mortgages averaged 5.57 percent, down from 5.63 percent last week, Freddie Mac said in its weekly survey. Rates for 15-year, fixed-rate mortgages, a popular option for refinancing, fell to 5.10 percent from 5.14 percent.
Fannie Mae and Freddie Mac are falling short of their core missions, an assistant secretary at the Department of Housing and Urban Development said. The government-chartered mortgage companies "need to do more to benefit low- and moderate-income families and residents of underserved areas that lack access to credit," John C. Weicher said in testimony before the Senate Banking Committee.
Jobless claims fell 13,000 last week to 303,000, the lowest level in more than four years, the Labor Department said. The four-week average, a less volatile measure, dropped to 315,500, also the lowest since 2000, from 331,500.
United Airlines, under bankruptcy protection for two years, plans to reduce pension payments to retired pilots next month by as much as 40 percent, it said in a letter to the retirees, because the federal agency that insures pensions is seeking to take over the pilots' plan. Cutting benefits without bankruptcy court approval would be illegal, the United Retired Pilots Benefit Protection Association said.
Three criminal defense groups asked an appeals court to overturn the obstruction-of-justice conviction of former Credit Suisse First Boston banker Frank P. Quattrone, citing the judge's "transparent bias." The National Association of Criminal Defense Lawyers, New York State Association of Criminal Defense Lawyers and California Attorneys for Criminal Justice assailed rulings by presiding U.S. District Judge Richard Owen. Quattrone is appealing the conviction.
Ford would guarantee black employees access to an apprenticeship program, from which they say they were illegally barred in the automaker's factories, under a settlement that won a federal judge's preliminary approval. Ford says it did nothing wrong in administering the nationwide program at its plants.
Arett Sales is recalling about 2 million multipurpose barbecue lighters because they fail to meet federal standards for child-resistant mechanisms, the Consumer Product Safety Commission said. The Kitchen Works lighters were sold at discount stores nationwide from January 2001 through July 2004 for about $1.
General Motors is recalling nearly 200,000 vehicles from the 2004 and 2005 model years, including 155,465 pickup trucks, vans and sport-utility vehicles, because of possible brake malfunctions, the National Highway Traffic Safety Administration said. GM also is recalling 19,924 2004 Cadillac XLR coupes and SRX SUVs and Pontiac Grand Prix sedans because of potential accelerator problems. And 17,815 2005 Buick, Chevrolet, GMC and Isuzu SUVs are being recalled because the windshields are not fitted properly.
George Soros, challenging a conviction for insider trading that brought a fine of 2.2 million euros, about $2.8 million at yesterday's exchange rate, denied the charges in a French appeals hearing and insisted he knows the difference between inside and public information. The billionaire investor confirmed receiving some information from French financier Georges Pebereau about Societe Generale shortly before Soros bought shares in the bank but said Pebereau had been "discussing it with many other people."
Dominion Resources did not gain a trading advantage as a result of a reporting error in natural gas storage levels that sent prices soaring on Nov. 24, federal regulators said. An interim report by the Federal Energy Regulatory Commission released on Dec. 17 found that a Dominion clerk accidentally sent to the U.S. Energy Department the company's storage levels for the wrong week. The error, which was included in the department's weekly inventory, made it appear that U.S. gas supplies were falling faster than had been thought.
The Air Force is reconsidering a proposal to cancel the C-130J transport plane after discovering that termination could cost more than expected. The Pentagon had estimated it would cost $500 million, but that estimate is probably low, Gen. John P. Jumper, the Air Force chief of staff, told the Senate Armed Services Committee. The Pentagon proposed canceling the Lockheed Martin program as part of more than $30 billion in spending cuts over the next six years. Separately, Bethesda-based Lockheed said it was granted export licenses to sell C-130J planes and P-3C Orion naval surveillance aircraft to India.
Chrysler Group, the U.S. arm of DaimlerChrysler, said fourth-quarter profit nearly tripled, to $522.6 million, largely on sales of new vehicles. Revenue increased 11 percent, to $17.21 billion. For the full year, Chrysler swung to a profit of $1.93 billion, compared with a loss of $637.4 million. Revenue for the year rose 4 percent, to $67.19 billion.
GlaxoSmithKline reported a 21 percent increase in fourth-quarter profit, to $1.79 billion, as additional offerings of its key antidepressant drugs began to offset some of the generic competition that has curtailed the company's sales. The world's second-largest drug company said sales slipped 1 percent, to $9.9 billion. For the full year, profit fell 4 percent, to $8 billion, and sales fell 5 percent, to $38.05 billion.
Aetna, the third-largest U.S. health insurer, said fourth-quarter earnings rose 21 percent, to $300.7 million, on higher premiums and enrollment. Revenue rose 13 percent, to $5.2 billion. For the year, earnings rose 29 percent, to $2.2 billion, as revenue rose 11 percent, to $19.9 billion.
Loews said fourth-quarter profit soared 37 percent, to $502.8 million, thanks to robust earnings at its CNA Financial unit. Revenue at the holding company, which owns Lorillard and the Loews hotel chain, fell 6.6 percent, to $4.05 billion from $4.34 billion. For 2004, Loews swung to a profit of $1.23 billion from a net loss of $610.7 million in 2003. Revenue dropped 7.4 percent, to $15.24 billion from $16.46 billion.
May Department Stores' fourth-quarter earnings slid 20 percent, to $339 million. The operator of Hecht's, Lord & Taylor, Filene's and other department stores said sales rose 12 percent, to $5.04 billion. But sales at stores open at least a year fell 5.2 percent. For the fiscal year, May's profit rose 20 percent, to $524 million. Revenue rose 8 percent, to $14.44 billion.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.