Bank of America to Sell Shares
Bank of America reported a 68 percent drop in third quarter profit and said it would seek to shore up its balance sheet by cutting its dividend and selling new shares. Bank of American said its profit fell to $1.18 billion, or 15 cents a share, from $3.7 billion, or 82 cents a share, in the comparable period last year. That was much lower than analysts' estimates of 62 cents per share, according to Thomson Financial.
To raise capital, the Charlotte, N.C.-based company said it plans to sell $10 billion of common stock and cut its quarterly dividend to 32 cents from 64 cents.
The company reported its results two weeks earlier than scheduled.
Cox Wins Patent Dispute
Cox Communications, a cable television provider that offers phone service, did not infringe six patents held by Verizon Communications related to connecting Internet calls to standard phone lines, a federal jury ruled. The jury in Alexandria rejected Verizon's allegations and declined to award the $404 million in damages the company requested.
Verizon sued in January, claiming infringement and seeking an order blocking Cox from using the technology. Several of the patents in question were asserted by Verizon in its successful patent-infringement litigation against Vonage Holdings.
MERGERS & ACQUISITIONS
Eli Lilly to Buy ImClone
Eli Lilly has agreed to spend more than $6 billion to fortify its cancer treatment portfolio by acquiring the biotechnology firm ImClone Systems in a deal that tops earlier offers from competitor Bristol-Myers Squibb. Lilly announced that it will pay $70 per share for ImClone.
Bristol-Myers then said it would not increase its latest offer of $62 per share. Lilly executives said the ImClone deal would expand Lilly's cancer treatment pipeline a few years before several significant patent expirations hit the drugmaker.
ImClone had previously rejected as too low two offers from Bristol-Myers, which gets a share of sales from the cancer drug Erbitux.
T-bill rates fell, with the yields on three-month bills falling to the lowest level on record, reflecting continued strains in the credit markets. The discount rate on three-month Treasury bills auctioned yesterday fell to 0.46 percent from 1.10 percent last week. The three-month rate was the lowest level on record for an initial government offering, though the bills have traded at lower levels in the secondary market. Rates on six-month bills fell to 1.10 percent from 1.54 percent. The annualized return to investors is 0.467 percent for three-month bills, with a $10,000 bill selling for $9,988.37, and 1.122 percent for a six-month bill selling for $9,944.39. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 1.55 percent last week from 1.89 percent two weeks ago.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.