Acquisition costs would have to be charged against operating income under a proposal by accounting rule makers, which would reduce reported earnings for many companies. The decision by the Financial Accounting Standards Board is part of an overhaul of merger accounting that's expected to require that all companies show on their balance sheets the full cost of acquisitions. That includes goodwill, or the amount paid over the book value of an asset.
MCI WorldCom, the second-largest U.S. long-distance phone company, said it expects to spend the $1.42 billion it received from the sale of its Systemhouse consulting unit to expand local and international operations. It said the money will be used to finance an undersea fiber-optic cable, to enlarge networks in Europe and Asia, and to expand the company's fiber-optic network in Baltimore, Atlanta, Portland, Ore., and Princeton, N.J.
Meanwhile, MCI WorldCom said it is providing local telephone service to 75,000 residential lines in New York. The customers who signed up for the company's local service, launched four months ago, represent about 15 percent of its long-distance business in the state, John Donoghue, senior vice president for mass markets, said at a company briefing with industry analysts.
Online brokerage Charles Schwab Corp. and Tokio Marine and Fire Insurance of Japan agreed to form a full-service brokerage in Japan aimed at individual investors.
Sun Healthcare Group, one of the nation's largest nursing home companies, missed a $7 million payment to bondholders because its bank lenders blocked the payment. A spokeswoman for the Albuquerque company, which has incurred heavy losses, said its options include a bankruptcy-protection filing.
Steelmakers asked the government to impose duties of
as much as 223 percent on imports of cold-rolled steel from Japan, Brazil, China and nine other countries. Nine companies accused overseas producers of "dumping," or selling in the United States below cost. It's part of an industry campaign against what the steelmakers say are unfairly priced imports that have taken away orders from U.S. mills and dragged down domestic prices.
Ford and DaimlerChrysler said vehicle sales rose last month as industry sales hit a record pace. General Motors sales fell as expected, dropping 4.8 percent from May 1998, when discounts were heavy. Ford's sales of North American-built vehicles rose 7.7 percent, while DaimlerChrysler's sales rose 5.9 percent, both ahead of estimates. Toyota's sales rose 4.7 percent for its best month ever, while Honda's sales climbed 6 percent to set a record for the month.
Information on California residents' salaries will soon be sold to private information companies, mortgage lenders, car dealers and other creditors seeking to verify a person's annual income. A little-noticed law passed last summer cleared the way for the state Employment Development Department to begin disclosing the private wage data it collects on about 14 million Californians. Banks and lenders, who pushed for the legislation, say the salary data will enable them to process loan applications faster and reduce fraud. While proponents stress that the law permits only disclosure of income information if individuals give their written permission, it will depend on an untested honor system that critics say is open to potential abuse.
American Home Products, a leading maker of drugs, herbicides and pesticides, likely will sell or spin off its agricultural chemicals unit as it loses sales to rival Monsanto's Roundup brand of weed killers, analysts said. American Home warned that its agricultural unit's poor performance would reduce its 1999 profit.
Adobe Systems, the world's biggest maker of graphics software used by newspapers and magazines, will cut 250 jobs, or about 9 percent of its work force, the second time it has slashed jobs in nine months. Adobe said it will take a charge of $15 million to pay for the move.
Procter & Gamble agreed to sell its North American and European Attends adult-diaper business to closely held Paper-Pak Products as it sheds smaller businesses. Terms weren't disclosed.
Neuberger Berman plans to reopen its $890 million Genesis Fund to new investors and to introduce a new Regency Fund that will invest in shares of small and medium-size companies. The Genesis Fund was closed in March 1998. Since then, the fund has declined about 17 percent as the types of small-cap stocks it buys slumped.
Coca-Cola received clearance from the British government for its purchase of soft-drink brands from Cadbury Schweppes. The clearance comes after Coke scaled down its purchase of the brands, which include Dr Pepper and Cresta lemonade, to about 100 nations from an original 120. The purchase, with a new price tag of $1.1 billion, now excludes most European markets after the original $1.85 billion accord hit antitrust hurdles.
British Steel and Royal Hoogovens, a Dutch steel and aluminum maker, said they are in merger talks that would create Europe's second-largest steelmaker, with a range of products used in everything from bridges to car parts. The companies didn't specify what form the combination would take, though analysts speculate British Steel would acquire Hoogovens.
Air Canada said it will offer nonstop service every business day between Ottawa and Washington's Reagan National Airport starting Aug. 3, and has plans for additional flights in the near future.