Delta Warns of Strike Risks
Delta Air Lines said that if its pilots strike should their contract be rejected in bankruptcy court, it would be "murder-suicide" and in effect would put the nation's third-largest carrier out of business. The comments by the Atlanta-based airline in a court filing came days before a U.S. Bankruptcy Court hearing in New York on Delta's request to reject its pilots' collective bargaining agreement.
Delta said that if its motion is granted it will impose $325 million in concessions it is seeking from its pilots. The cuts would be on top of $1 billion in annual concessions the pilots agreed to in a five-year deal reached in 2004. That deal included a 32.5 percent pay cut. Union spokesman John Culp said the pilots are united in their position, though he stressed there has been no determination on a specific course of action.
Hurricanes Hit AIG Results
American International Group said its third-quarter profit fell to $1.72 billion, as the company absorbed catastrophe-related losses of $1.6 billion, mostly from Hurricane Katrina. In the third quarter last year, AIG earned $2.69 billion.
The report, released after the close of financial markets, had been delayed by several days as the New York company grappled with a restatement of financial results for fiscal 2002, 2003 and 2004 to correct accounting errors.
The restatement, which the company said also would affect some statements from 2001 and 2000, was the second this year.
In late May, AIG restated five years of results, cutting shareholders' equity by $2.26 billion, after New York Attorney General Eliot L. Spitzer launched an investigation into whether the company was using accounting tricks to boost its stock.
CBO Director to Leave Dec. 30
Congressional Budget Office Director Douglas Holtz-Eakin will step down on Dec. 30 to join the Council on Foreign Relations as the Paul A. Volcker Fellow in International Studies and director of the New York-based independent research group's geo-economic studies center. Deputy Director Donald Marron will take over Holtz-Eakin's job at the CBO until a permanent replacement is found.
Lowe's said its third-quarter profit climbed 26 percent, to $649 million from $516 million in the comparable quarter a year earlier, as customers bought more cabinets and appliances. Revenue for the three months ended Oct. 28 rose 17 percent, to $10.59 billion, the Mooresville, N.C.-based home improvement retailer said.
Tyson Foods, the world's largest meat company, said its fiscal fourth-quarter profit rose 49 percent, to $98 million from $66 million. The results in the year-ago quarter included various charges. Sales fell 9 percent, to $6.5 billion from $7.15 billion, mainly because of lower volume from one less week of sales this year. The latest results missed analysts' forecasts, sending Tyson shares down $1.99, or 10.8 percent, to $16.51.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday increased to 3.91 percent from 3.87 percent last week. Rates on six-month bills rose to 4.195 percent from 4.155 percent. The annualized return to investors is 4.004 percent for three-month bills, with a $10,000 bill selling for $9,901.16, and 4.345 percent for a six-month bill selling for $9,787.92. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 4.35 percent last week from 4.32 percent the previous week.
Compiled from staff and news service reports.