Review
Earnings Roundup: Overture Services Inc. reported third-quarter net income of $16.9 million, compared with $9.0 million for the like period a year ago. Revenues for the Pasadena-based Internet search engine rose to $172.7 million from $72.5 million. THQ Inc. reported third-quarter net income of $4.8 million, compared with $3.2 million for the like period a year ago. But the Calabasas-based video-game maker said fourth-quarter sales might drop because of a slumping economy, leading to a sharp dropoff in its stock. Metro-Goldwyn-Mayer Inc. reported third quarter net income of $11.7 million, compared with a loss of $16 million for the like period a year ago. Revenue for the Santa Monica film company fell 3.1 percent, to $381.2 million. Occidental Petroleum Corp. reported third quarter net income of $402 million, compared with $444 million for the like period a year ago. Revenue fell 1 percent, to $1.96 billion. Hilton Hotels Corp. reported third quarter net income of $48 million, compared with $21 million for the like period a year ago. Revenue fell 1 percent, to $934 million. Hilton lowered its forecast for the fourth quarter and 2003, citing dropping room rates. Jakks Pacific Inc. reported third-quarter net income of $14 million, compared with $10.9 million for the like period a year ago. Revenue for the Malibu-based toy maker rose 10 percent, to $102.6 million. Ryland Group Inc. reported third-quarter net income of $47.4 million, compared with 37.2 million for the like period a year ago. Revenue for the Calabasas-based homebuilder rose 3 percent, to $714 million. Amgen Inc. reported a third-quarter loss of $2.6 billion, compared with net income of $330 million for the like period a year ago. The loss was due to a $3 billion charge related to the Thousand Oaks-based company’s acquisition of Immunex Corp. Unocal Corp. reported third-quarter net income of $99 million, compared with $102 million for the like period a year ago. Revenue for the El Segundo-based oil company fell 19 percent, to $1.29 billion. Countrywide Credit Industries Inc. reported third-quarter net income of $228 million, compared with $149 million for the like period a year ago.
EchoStar: As expected, satellite operators EchoStar Communications Corp. and Hughes Electronics Corp. filed a revised plan with the Justice Department in an effort to appeal an earlier recommendation that the merger of the two companies be blocked. As part of the revision, EchoStar and Hughes have agreed to sell broadcast spectrum to Cablevision Systems Corp., which plans to launch its own satellite service.
Accounting Breach: Global Crossing Ltd. said it would restate $13 million in profits from swap transactions and won’t be able to use $1.2 billion of future revenue from the swaps because they violate Securities and Exchange Commission violations. In the controversial swap transactions, companies trade amounts of capacity and then book it as revenue. The announcement marks the first time that Global acknowledged that it breached accounting rules.
Ford Verdict: The California Supreme Court declined to a review a $290 million punitive damages verdict against Ford Motor Co. stemming from a 1993 wreck involving a sports utility vehicle. The U.S. and California chambers of commerce had filed friend-of-the-court petitions to support Ford’s claim that the verdict was excessive.
Power Sale: The state of California sold $4.25 billion worth of California debt securities as the first phase of a $12 billion sale of energy bonds. Proceeds will be used to repay loans from banks and the state’s general fund that were used to purchase electricity during the power crunch in 2001.
Preview
REITs Aplenty: Earnings season turns to the real estate investment trusts this week, with reports due from Arden Realty and Kilroy Realty, along with a host of others with substantial holdings in L.A. (though not based here). Among the other companies reporting quarterly earnings: Ducommun, j2 Global Communications, Mercury General, Activision, Guitar Center, Unova, Diodes, eUniverse, Fremont General, Pacific Energy Partners, American States Water, Capstone Turbine, IndyMac Bancorp and Westwood One.
Scaaaary Time: Thursday (31st) is Halloween, which over the years has become a merchandising and entertainment gold mine, as kiddies and adults alike get caught up in the spookiness of Hallows Eve. Not a great night to be driving if you can avoid it.
Healthy Lunch: Actress Janet Leigh is honored on Tuesday (29th) at the Research & Education Institute at Harbor-UCLA Medical Center’s first annual Commitment to Healthy Living Award Luncheon at the Beverly Hills Hotel. For information: 310-222-4240.
Sports Beat: The Kings are on the road on Tuesday (29th) at Atlanta and Thursday (31st) at Chicago before returning to Staples on Saturday (2nd) to face Nashville. As for college football, the 15-ranked USC Trojans are off this week, while the fast-fading UCLA Bruins are at Washington. Also, the NBA season gets started, with the world championship Lakers opening the year Tuesday (29th) at home against San Antonio and the Clippers getting started the next day (30th), also at home, against Cleveland.
Numbers News: Two important economic reports due out: On Thursday (31st) comes the third quarter gross domestic product, which is expected to show a solid 4 percent annual growth rate. Then on Friday (1st) comes the October unemployment rate, which is likely to rise a bit from September’s 5.6 percent figure. State jobless numbers are due out the following week.
Supes Vote: County Supervisors are scheduled to vote Tuesday on whether to convert Harbor-UCLA Medical Center and another hospital into outpatient clinics to help plug a massive deficit in the county health budget. The supervisors have been coming under increasing pressure to delay that action now that Tom Scully, a top Bush Administration health official, is planning to visit the South Bay facility Nov. 6 as part of a tour of the county’s health system. County, state and federal officials are in joint negotiations over a possible federal bailout of the underfunded system, which serves the largest population of uninsured patients in the country. Scully has called the pre-election vote politically motivated and GOP Supervisor Don Knabe is proposing to push it back to Dec. 2.
