SBC Communications, the nation's second-largest local phone company, reached a tentative five-year agreement with 100,000 union workers that guarantees no layoffs of employees currently on the payroll for the life of the agreement. While some increases in co-payments for medical services and prescription drugs were agreed upon, SBC will continue to provide fully paid health care benefits, the union said. On average, employees will receive base wage increases of 2.3 percent per year for five years and lump sums averaging $300 per year, said SBC officials. The agreement, which still must be ratified, came shortly after a four-day strike by the Communications Workers of America.
Weapons Contract Re-Awarded
The Army awarded a contract worth as much as $256 million over two years to a Vienna-based joint venture to train and equip Iraqi military and security forces with vehicles, pistols and machine guns. The Anham Joint Venture includes American International Services/Uni Trans of Reston; HAIFinance of Tysons Corner; Astra of Riyadh, Saudi Arabia, and the Munis Sukhtian Group of Amman, Jordan. The Army in March terminated an earlier $327 million award to another Jordanian company, Nour USA, after accusations by competitors that it had won because of a friendship between its chairman and Ahmed Chalabi, a then-influential member of the Iraqi Governing Council who recently fell out of favor with U.S. officials.
Computer Associates International offered $10 million to settle a two-year government investigation into the software company's accounting practices, Chief Financial Officer Jeffrey Clarke said. The Islandia, N.Y.-based company recorded an expense for the potential settlement in its fourth-quarter results, Clarke said. The company said the government hasn't accepted or rejected the offer. An agreement with the Justice Department and Securities and Exchange Commission would end probes that led to the firing of 14 executives and the resignation last month of chief executive Sanjay Kumar.
Existing-home sales reached the second-highest level on record in April as buyers attempted to nab still-low mortgage interest rates before they rise, the National Association of Realtors reported. April sales, which surpassed economists' expectations by about 190,000 homes, clocked in at a seasonally adjusted annual rate of 6.64 million, a 2.5 percent increase over March, and second only to the all-time monthly high rate of 6.68 million in September 2003.
Tyco's former human resources director testified that former chief executive L. Dennis Kozlowski told her that Tyco's board had approved a bonus of $12 million for former general counsel Mark Belnick. Patricia Prue said at Belnick's trial that she learned that the bonus wasn't reflected in board minutes only after she wired $2 million into Belnick's checking account. Prosecutors say the board never approved the $12 million bonus and that it was a payoff for hiding Kozlowski's financial dealings from investors and the SEC. The payment is the basis of the most serious charge against Belnick, grand larceny.
Consumer confidence was virtually unchanged in May after improving more than expected in the previous month, the Conference Board said. The Consumer Confidence Index edged up to 93.2 from a revised 93.0 reading in April, the New York-based group said.
HealthSouth said bondholders with notes due in 2012 had declared the rehabilitation giant in technical default because of its failure to file new financial statements as it tries to recover from a huge accounting scandal. The company has said repaying debt on an accelerated schedule could lead to bankruptcy. In a statement, the company said it was current on all payments and the default notice would not affect operations.
Hollinger International is reviewing its options after the buyout firm Kohlberg Kravis Roberts failed to submit a bid for Hollinger, according to the Chicago Sun-Times and the Times of London. No other known bidders are believed to want all of Hollinger's assets, which include the Sun-Times and several other papers in the United States, Canada, Britain and Israel, making it more likely that the company will be broken up.
Microsoft, in response to complaints that customers must upgrade too soon when product support expires, said it will extend support from seven years to at least 10.
NextWave Telecom won a federal bankruptcy judge's approval of its settlement with regulators, ending a six-year dispute over a $4.3 billion debt for airwave licenses purchased at government auctions. NextWave last month agreed to return most of its spectrum licenses to the Federal Communications Commission and either return other airwave rights or pay $386 million out of proceeds from their sale.
Charles Schwab, the biggest discount brokerage, will cut trading commissions in June by as much as 67 percent to compete with lower-cost Internet brokers such as E-Trade and Ameritrade. In the biggest change to San Francisco-based Schwab's pricing since introducing $29.95 Internet trades in 1998, it will drop commissions to $19.95 for most customers and $9.95 for individual investors with at least $1 million in assets at the firm.
Rite Aid's former vice president for pharmacy purchasing was sentenced to five months in jail for his role in an accounting scandal that sent the company's stock tumbling and forced it to restate its earnings for the late 1990s by $1.6 billion. Eric Sorkin was the first of six defendants to be sentenced in the case. Three others, including former chairman and chief executive Martin L. Grass, face sentencing later this week.
J.P. Morgan Chase and Bank One shareholders approved a $58 billion merger in separate votes. The new J.P. Morgan Chase, which would keep its New York headquarters, would have 2,300 branches and $1.12 trillion in assets.
PricewaterhouseCoopers said it would pay $50 million to settle a lawsuit filed by Raytheon shareholders who claimed the auditing firm signed off on misleading financial statements by the defense contractor. On May 13, Raytheon agreed to a $410 million settlement in an accompanying lawsuit brought by the same shareholders, but denied it had acted inappropriately. PricewaterhouseCoopers also denied wrongdoing.
Porsche and Volkswagen recalled 100,000 luxury sport-utility vehicles over rear seat-belt bolts that could come loose. The automakers jointly developed the Porsche Cayenne and Volkswagen Touareg, which share some parts. They blamed an unnamed supplier.
Forest-product companies' offices across Europe were subject to extensive surprise raids by European competition regulators, part of an investigation into alleged price fixing and cartel arrangements, the European Commission said. Companies that were raided included UPM-Kymmene, Stora Enso, M-Real, Metsaliito, and Norske Skog.
Acambis's experimental vaccine, ChimeriVax-West Nile, may be the first to fight West Nile virus, according to results from an ongoing safety study of the vaccine. All 15 people who received the vaccine produced antibodies against the virus within three weeks, the British company said.
NeighborCare of Baltimore rejected a $1.33 billion buyout offer from rival Omnicare, which controls about a third of the $7 billion business of providing pharmacy services to nursing homes.
Genworth Financial, the Richmond-based insurance unit of General Electric, held steady in its first day of trading as a public company, closing at $19.50. The offering of 145 million shares priced below estimates of $21 to $23 a share. Still, at $2.83 billion, it was the largest IPO so far this year. GE retained 70 percent ownership of Genworth, but GE has said it plans to sell the remaining shares.
Krispy Kreme reported its first quarterly loss since going public in 2000, saying low-carb diets were hurting its results. It lost $24.4 million for its first fiscal quarter ended May 2, compared with a profit of $13.1 million in the same quarter a year ago.
TiVo's first-quarter loss grew to $9.07 million, from $7.88 million a year ago.
Williams-Sonoma said profit jumped 60 percent, to $21.4 million, helped by strong sales at its Pottery Barn, Pottery Barn Kids, and Williams-Sonoma stores as well as cost-cutting measures.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers