February 7 – 13
Moody’s Mood: California’s bond rating was lowered by Moody’s Investors Service because of a record $34.6 billion budget deficit. Moody’s lowered California’s $21.9 billion in general obligation debt to A2 from A1 in line with ratings assigned by Standard & Poor’s and Fitch. California is tied with Louisiana for the lowest credit grade. Lower ratings can cut the value of existing bonds and raise future borrowing costs.
Oscar Nominees: Miramax captured three of the five best-picture nominations for the 75th Academy Awards: “Chicago,” “Gangs of New York” and “The Hours,” which was co-produced with Paramount. The other two nominations for best film are New Line’s “Lord of the Rings: The Two Towers” and Focus Features’ “The Pianist.” Miramax, a unit of Walt Disney Co., led in total nominations with 38, including 13 for “Chicago” and 10 for “Gangs of New York.” Miramax this year beat its previous record of 28 Oscar nominations in 1998. Nominations can often boost a movie’s sales, giving Burbank-based Disney a chance to bounce back from “Treasure Planet,” an animated flop that reduced overall profits for the past two quarters. The Academy Awards will be presented on March 23.
Earnings Recap: Entravision Communications Corp. reported a fourth-quarter net loss of $1.9 million, compared with a loss of $21.8 million for the like period a year ago. Revenue for the Santa Monica-based broadcast company was $62.5 million from $53.6 million. WellPoint Health Networks Inc. reported fourth-quarter net income of $180 million, compared with $109.9 million for the like period a year ago. Revenue for the Thousand Oaks-based parent of Blue Cross of California rose 34 percent, to $4.58 billion. PacifiCare Health Systems Inc. reported fourth-quarter net income of $37 million, compared with a net loss of $26 million for the like period a year ago. Revenue for the Cypress-based health care operator fell 4.6 percent, to $2.74 billion. News Corp. reported second-quarter net income of $239 million, compared with a loss of $606 million for the like period a year ago. Revenue for the Sydney, Australia-based media company rose 14 percent, to $4.68 billion. News Corp.’s publicly traded Fox Entertainment Group Inc. reported second-quarter profit of $283 million, compared with $455 million for the like period a year ago. Revenue rose 15 percent, to $3.15 billion. The earnings drop was attributed in part to the poorly performing Fox Broadcasting. Farmer Bros. reported second-quarter net income of $5.9 million, compared with $9.7 million for the like period a year ago. Revenue for the Torrance-based coffee company was $54 million. Guitar Center Inc. reported fourth-quarter net income of $13.4 million, compared with $6.6 million for the like period a year ago. Revenue for the Westlake Village-based retailer was $334.8 million.
Currency Arrests: Two Los Angeles men were arrested by the FBI on charges they stole $77 million from more than 100 investors in foreign currency trades. Moshe Leichner and his son Zvi Leichner, who operated a company called Midland Euro, told investors they would use their money to generate profits through foreign currency trades. But the U.S. Attorney’s office said they invested only a fraction in foreign currency and used the rest to buy themselves planes, houses and other assets.
Spy Planes: Northrop Grumman Corp. received a $302.9 million Air Force contract to expand production of its Global Hawk unmanned spy plane used in Afghanistan. L.A.-based Northrop will make six more planes, adding to seven already delivered. The work will be done in San Diego and completed in 2005.
President’s Day: All government offices, financial markets and some businesses will be closed on Monday (17th) for the President’s Day holiday (originally established to honor George Washington and Abraham Lincoln but now including all U.S. presidents). Most stores will be open.
Economic Reports: A relatively light week, with January’s index of leading indicators due out on Thursday (20th) and the Consumer Price Index out on Friday (21st).
Fraud Talk: Debra Yang, the U.S. Attorney for the Central District of California, speaks on Wednesday (19th) at a breakfast meeting sponsored by the law firm of Alschuler Grossman Stein & Kahan. Yang will speak on national security, corporate fraud and other challenges facing law enforcement. At the Peninsula Hotel in Beverly Hills from 7:30 a.m.-9 a.m. For information: 310-255-9107.
Ad Tributes: Longtime L.A. advertising executives Gerry Rubin and Larry Postaer receive the Lifetime of Leadership Award by the Advertising Club of Los Angeles on Thursday (20th) at the Regent Beverly Wilshire. Cocktail reception at 7; dinner at 8. For information: 323-655-1951.
Hall of Fame: The Business Journal hosts its annual Business Hall of Fame Awards on Wednesday (19th) at the Beverly Hilton Hotel where MannKind Corp. Chairman Alfred Mann (photo, right) will be named 2002 Businessperson of the Year. For information: 323-549-5225 ext. 231.
Sports Beat: Some do-or-die games for the Lakers during this stretch of the season: at home on Tuesday (18th) against Houston, Friday (21st) against Portland and Sunday (23rd) against Seattle. The already dead Clippers are home on Wednesday (19th) against Milwaukee and Saturday (22nd) against Atlanta. The Kings are home on Monday (17th) against San Jose. As for college hoops, UCLA plays contending California on Thursday (20th) at Pauley Pavilion and Saturday afternoon (2 p.m.) against Stanford, while USC takes on Stanford on Thursday at the Sports Arena and California on Saturday night. And Thursday-Sunday, there’s the Nissan Open at Riviera Country Club.
Award Season: Will it ever end? On Sunday (23rd), it’s the Grammy awards, this year from New York’s Madison Square Garden. On Saturday (22nd), the Art Directors Guild has its annual bash at the Beverly Hilton.
Bhutto Speech: It seems like a lifetime ago since Benazir Bhutto was head of Pakistan (the first woman prime minister of an Islamic country). She speaks on Wednesday (19th) at Pasadena Civic Auditorium as part of the Distinguished Speakers Series. Program starts at 8 p.m. For information: 310-546-6222.