H&R Block Restates Earnings
H&R Block restated its earnings for 2003 and 2004. While 2004 earnings increased $11.4 million, or 6 cents per share, 2003 earnings fell $102.5 million, or 56 cents per share. Much of the restatement centered on accounting errors made during the company's acquisition of Olde Financial in 2000.
The Kansas City, Mo., tax-preparation firm also agreed to acquire the Tax & Business Services division of American Express for about $220 million. It will be combined with Block's RSM McGladrey Business Services subsidiary. McGladrey, which provides tax, accounting and other services for mid-size businesses, has several offices in the Washington suburbs. The combined company, with more than 5,000 accounting professionals, is expected to have more than $1 billion in annual revenue.
Pharmacists Join Walgreen Suit
Three pharmacists joined a federal lawsuit accusing Walgreen of discrimination against black managers. The plaintiffs seek class-action status, which could extend the suit to thousands of other blacks who worked at Walgreens in 45 states. Both plaintiffs' groups accuse the company of steering black employees to stores in areas with mostly black or lower-income customers and denying them advancement opportunities.
Manufacturing Rebounds in July
U.S. manufacturing expanded in July at the fastest pace of the year as orders surged, a sign that factories are helping fuel economic growth this quarter. Manufacturing is rebounding after swollen stockpiles at companies such as automaker General Motors limited orders earlier in the year. Orders were the highest of the year, and production expanded at the fastest rate since September.
Suit Alleges Kickbacks at UBS
UBS brokers received kickbacks for steering clients into high-fee mutual funds, according to a lawsuit against Europe's largest bank. The suit, filed in federal court in New York, claims UBS pushed investors into 21 fund companies that had promised to reward brokers with bonuses and other payments. The class-action lawsuit seeks unspecified monetary damages.
MERGERS & ACQUISITIONS
Kinder Morgan Buys Terasen
Kinder Morgan, which operates about 35,000 miles of U.S. pipelines, agreed to buy Canada's Terasen for $3.1 billion in cash and stock to take advantage of increased oil output from Canada. Kinder Morgan will also assume about $2.5 billion of Terasen's debt. Output from Canada's oil sands, where tar-like heavy oil is trapped in sand, is forecast to rise as much as 1 million barrels daily over the next decade. Vancouver-based Terasen also owns Terasen Gas, a utility with about 880,000 customers in British Columbia.
Shurgard Rejects Acquisition Offer
Shurgard Storage Centers said its board rejected an unsolicited $2.49 billion acquisition offer from rival Public Storage. The offer, which Public Storage disclosed earlier in the day, was for 0.8 shares of its stock for each Shurgard share, representing $53.40 per Shurgard share, or a 14 percent premium to its Friday closing price.
Procter & Gamble Profit Up 9%
Procter & Gamble said its fiscal fourth-quarter profit rose 9 percent, to $1.49 billion from $1.37 billion, on strong sales of its products in China and other developing markets. Revenue for the three months ended June 30 rose 10 percent, to $14.26 billion.
Humana's Quarterly Profit Climbs
Humana, the biggest manager of health plans for the U.S. military, said second-quarter profit rose 4.2 percent, to $84.1 million, as enrollment increased in the company's Medicare health plans.
T-bill rates rose. The discount rate for three-month bills auctioned yesterday rose to 3.4 percent, from 3.345 percent a week ago. Rates on six-month bills rose to 3.6 percent, up from 3.54 percent. The actual return to investors is 3.477 percent for three-month bills, with a $10,000 bill selling for $9,914.06, and 3.718 percent for a six-month bill selling for $9,818.00. Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.77 percent last week from 3.68 percent the previous week.
Compiled from staff and news service reports.