Starbucks said it will take a more conservative approach to investing in Internet companies, three weeks after the coffee-bar company warned that the cost of its recent Internet push would reduce earnings this year. But Starbucks also said it is making an investment in Living.com, an online retailer of home furnishings that will open soon. Terms were not disclosed. The company reported that fiscal third-quarter net income rose to $24.6 million, from a profit from operations of $20.9 million a year earlier.
The FTC was presented with 200,000 pieces of randomly collected "spam" by lawmakers and industry supporters of a House bill that seeks to reduce the amount of the unsolicited bulk e-mail that is being sent. The bill is modeled after a California law passed last year that would give Internet service providers a civil "cause of action" against spammers at the cost of $50 a message, up to $25,000 a day. It also would give prosecutors criminal penalties to use against those who hijack a domain address.
Liggett Group's proposed settlement, which it said it needed to avoid bankruptcy, has been rejected by an Alabama county judge. Liggett, which provided key evidence that led to the national tobacco settlement, had sought to head off future lawsuits by smokers by creating a fund that would pay $1 million annually for claims. But Mobile County Judge Robert Kendall refused to approve the agreement, which was reached with lawyers representing smokers nationwide. After the ruling, spokesman Paul Caminiti said the company was reviewing its options but was "absolutely not considering bankruptcy."
Trans World Airlines' two-year labor dispute ended when union machinists announced they had accepted the company's contract terms and will not strike any time soon. The machinists ratified the agreement their union leaders negotiated, averting for at least 18 months a work stoppage that threatened to cripple the airline. Union spokesman Bob Haynes would not release the vote count. Under the deal, the 16,000 union mechanics, ramp workers, ticket agents and flight attendants will get double-digit pay raises, bringing them up to 90 percent of the projected industry wage standard by summer 2001. The contract takes effect Aug. 1.
American Express announced that it will offer checking accounts, certificates of deposit, money-market accounts and bill payment over the Internet through its new Membership Banking service. The company said it wants a piece of the rapidly growing Internet banking business and hopes its name will attract consumers to whom it can then sell cards and other financial products.
American International Group, the largest U.S. insurer by market value, said second-quarter earnings increased 20 percent, led by gains in its property and casualty division. Income from operations, excluding investment gains, rose to $1.27 billion, from a year-earlier profit of $1.06 billion, which was restated for the purchase of SunAmerica.
Walt Disney Co. reported that fiscal third-quarter earnings fell 12 percent, to $367 million, as an Internet acquisition and lower merchandise sales offset strong showings by its theme parks and movies. The earnings include costs associated with the November 1998 acquisition of a 43 percent interest in Internet search engine Infoseek.
Dow Chemical said earnings fell 4 percent in the second quarter, hurt by declining chemical prices. Dow reported earnings of $410 million, up from $425 million a year earlier.
Gateway said second-quarter earnings rose 47 percent, to $89.2 million, driven by consumer demand for personal computers as well as services such as Internet access and financing.
Halliburton, the world's biggest oil-field service and equipment company, said second-quarter net income fell 66 percent to $83 million, as the lingering effects of a slump in oil prices slashed demand.
Mattel reported that second-quarter operating earnings rose 81 percent, $62.5 million, boosted by strong sales of its Fisher-Price line of preschool toys and software sold by its Mattel Media division.
McDonald's said its second-quarter profit jumped 45 percent, to $518 million, amid strong sales overseas and heavy promotional activity domestically. Year-earlier results included a charge of $110 million related to the cutting of staff and expenses.
Nucor, the second-biggest U.S. steel producer, reported that second-quarter profit fell 30 percent, to $50.6 million, because of lower steel prices.
Quaker Oats said second-quarter operating profit rose 16 percent, to $229.8 million, driven by strong sales of oatmeal and its Gatorade sports drink. Taking special items into account, Quaker's net income more than tripled. Including a tax adjustment benefit this year and restructuring- and divestiture- related costs last year, its profit rose to $170.9 million, from $55.6 million a year earlier.
Raytheon said second-quarter earnings rose 12 percent, to $294 million, led by increased aircraft sales and cost cutting in its electronics division.
Schlumberger, the world's second-largest oil-field services company, said second-quarter profit fell 64 percent as the lingering effects of an oil price slump reduced demand for its products. Profit from operations fell to $138.3 million, from net income of $387.5 million in the year-earlier period.
Sprint, the third-largest U.S. long-distance phone company, said second-quarter profit rose 6 percent amid strong demand from businesses for Internet and data services. Net income was $386 million, compared with pro forma profit of $364 million a year earlier. The year-earlier results were stated as if the company had already split its wireless business from the rest of its operations.
Sun Microsystems said fiscal fourth-quarter profit rose 37 percent as Internet companies bought more of its server computers. Net income climbed to $395.2 million, from a profit from operations of $287.8 million a year earlier.
USX-Marathon Group, the sixth-largest U.S. oil company, said second-quarter profit from operations fell 27 percent, to $119 million, because profit margins for refining and fuel sales narrowed.
Warner-Lambert said its second-quarter earnings increased 36 percent, to $446.9 million, fueled by surging sales of the cholesterol drug Lipitor and big sales increases for HIV and anti-convulsant medications.
Xerox said second-quarter earnings rose 13 percent on higher revenue and cost savings from a restructuring program. Net income was $448 million, compared with $395 million in the same period a year earlier, before a restructuring charge of $1.11 billion. Including the restructuring charge, the company reported a loss of $712 million in the 1998 second quarter.
The State Department will buy $1.4 million worth of Iridium satellite telephones from Motorola, the biggest investor in the District-based Iridium LLC global satellite telephone network and manufacturer of the network's distinctive handsets. The order, which will pay for about 1,000 phones and accessories, will be used by the State Department and 260 diplomatic and consular posts "to expand their communications capability and enhance security posture abroad," the company said.