Delta Air Lines, despite a 13 percent second-quarter revenue increase, to $3.96 billion, reported a loss of nearly $2 billion because of hefty charges. Delta said its net loss for the three months ended June 30 was $1.96 billion, compared with a profit of $184 million in the same period a year ago. The loss included $1.65 billion in previously announced non-cash charges. Most of that, $1.53 billion, was the result of tax credits the airlines might not be able to use. An additional $117 million came from pension payouts as more pilots retired than Delta had expected. The Atlanta company, which is trying to avoid filing for Chapter 11 protection from its creditors, said the quarterly loss was the largest in its history.

Bayer to Buy Unit of Drug Firm Roche

Bayer will spend 2.38 billion euros (about $3 billion) for the non-prescription health care unit of Switzerland's Roche. The German drug and chemical company, known for its aspirin and products such as Alka-Seltzer, said the combined unit will have annual sales of about $3 billion and about 5 percent of the over-the-counter drug market. Roche will focus on more profitable prescription drugs and diagnostics.

MORE NEWS

The European Union unconditionally approved the merger of Sony Music and Bertelsmann AG's BMG unit. The deal leaves 80 percent of the world music market in the hands of four groups: Sony-BMG, Vivendi Universal, EMI and Warner Music. The 50-50 joint venture is still undergoing U.S. antitrust review, with that approval expected within days.

Eliot L. Spitzer, the New York attorney general, urged a federal judge to leave his lawsuit against former New York Stock Exchange chairman Dick Grasso in state court, arguing that Grasso's $139.5 million compensation package violated state law, not federal statutes or securities industry rules. Grasso's legal team, meanwhile, prepared to file its official response to Spitzer's lawsuit, which seeks to force the former NYSE chairman to return more than $100 million he was paid by the exchange.

Apple Computer, conscious of rivals' price-cutting, has introduced an iPod portable music player with lower prices and longer battery life. Since it introduced the first iPod in October 2001, the company has sold more than 3.7 million units and has about a 60 percent share of the hard-disk-drive player segment in the United States.

General Dynamics won an initial contract of $10 million -- ultimately worth as much as $1 billion -- to make miniature digital radios that will allow soldiers to communicate with other branches of the military. Research analyst Paul Nisbet said over the long term, the new equipment would revamp the Army's "entire soldier-communications system."

T-bill rates rose. The Treasury Department sold $18 billion of three-month bills at a discount rate of 1.330 percent, up from 1.315 percent last week, and $16 billion of six-month bills at a 1.650 percent rate, up from 1.630 percent. The actual return to investors is 1.352 percent for three-month bills, with a $10,000 bill selling for $9,966.40, and 1.687 percent for a six-month bill selling for $9,916.60.

Microsoft said it will pay $20 million to settle a trademark dispute over the use of the Lindows Internet domain name. Microsoft will gain rights to Lindows.com and other domains, and Lindows will stop using the names, Lindows said in a filing with the Securities and Exchange Commission. Microsoft had sued Lindows in December 2001, alleging that the company's use of "Lindows" violated its Windows trademark.

Verizon Wireless won court approval to buy one of bankrupt NextWave Telecom's airwave licenses in New York and New Jersey for $930 million, giving it broader coverage of an area with 20 million people. U.S. Bankruptcy Judge Adlai S. Hardin Jr. also approved Dallas-based MetroPCS's purchase of licenses in two Florida markets for $43.5 million, according to court documents.

Electronic Data Systems won an 81/2-year, $1.1 billion contract from Bank of America to merge the phone and computer systems of FleetBoston Financial, which the bank bought for $48 billion in April. About 150 former FleetBoston employees will join EDS. The contract follows a 10-year, $4.5 billion agreement that Bank of America signed with EDS in December 2002.

Halliburton disclosed in a Securities and Exchange Commission filing that a former employee of its KBR subsidiary has been subpoenaed by the Justice Department in a probe of possible overcharging of the U.S. government in Iraq. Also disclosed in the filing is a subpoena for information relating to Halliburton subsidiaries that do business in Iran. Halliburton in a statement pledged its cooperation and said, "We welcome a thorough review."

INTERNATIONAL

Monsanto won European Union approval for one of its gene-modified corn varieties to be used in animal feed. The decision by the European Commission is the bloc's first endorsement of a Monsanto biotech product in six years.

French workers at a Robert Bosch plant voted overwhelmingly to accept longer hours for no extra pay, the company said. Workers backed a deal requiring them to work an extra hour each week after they were threatened with layoffs and the possibility of moving a diesel pump production line to the Czech Republic.

LOCAL BUSINESS

Federal Realty Investment Trust of Rockville, which owns 16.9 million square feet of shopping centers in California and the Northeast and mid-Atlantic regions, has formed a joint venture with Clarion Lion Properties Fund of New York. The venture will buy up to $350 million of shopping centers along the East Coast and in California. Federal Realty and Clarion Lion, a private equity real estate fund that is managed by ING Clarion Partners, will put up $42 million and $98 million, respectively, into buying properties in the next two years.

EARNINGS

3M's second-quarter profit rose nearly 25 percent with increased international sales and higher sales in its display business. The St. Paul, Minn., firm said it earned $773 million, up from $619 million a year earlier.

Kraft Foods said its second-quarter earnings fell 26 percent as it paid more for commodities and marketing. Quarterly earnings fell to $698 million, from $949 million in the second quarter of 2003.

Occidental Petroleum reported a record second-quarter profit of $581 million as it benefited from higher oil and gas prices. Revenue rose 21 percent, to $2.75 billion. Oxy also said Dale R. Laurance will retire as its president Dec. 31 for health reasons. Chief executive Ray R. Irani will take over the position of president, and Executive Vice President John W. Morgan was named president of the firm's oil and gas corporation.

Mattel said second-quarter profit rose 12 percent, to $23.5 million, over the same period last year, boosted by lower expenses and increased American Girl and Hot Wheels sales.

Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.

Boeing chief executive Alan R. Mulally, above, and Noel Forgeard, his counterpart at European rival Airbus, announced at Britain's Farnborough International Air Show that demand for new passenger and freight aircraft is rebounding after an unprecedented global downturn and in spite of chronically high fuel costs. Mulally estimated that airlines will buy 25,000 new planes worth $2 trillion over the next two decades, while Airbus foresees global sales of 16,000 aircraft over the next 20 years, at least 1,500 of them to China.