Business briefs for April 25, 2000

Tuesday, April 25, 2000 | 11:25 a.m.

Profit tops expectations

Columbia/HCA Healthcare Corp.'s first quarter operating profit rose a better-than-expected 13 percent, driven by strong admissions at its hospitals owned for at least a year, the company said today.

Excluding unusual events including the sale of 81 hospitals and costs related to a federal fraud investigation, Columbia earned $306 million or 53 cents per share in the quarter, compared to $271 million or 42 cents per share in the same period a year ago. Results beat analysts' estimates by 7 cents, according to First Call/Thomson Financial.

Same-facility revenues, which looks at hospitals owned for at least a year and is a key barometer for the chain's fiscal health, rose 6.4 percent. Revenues per admission increased 3.8 percent.

First-quarter revenues fell 8 percent to $4.27 billion from $4.66 billion, reflecting Columbia selling 81 of its hospitals. It now owns 192 hospitals, including two in Las Vegas, and still is the nation's largest hospital firm.

Henderson operator reports big loss

Titanium Metals Corp. of Denver today reported a net loss of $15.1 million, or 48 cents per share, for the quarter ending March 31. In the year-ago quarter, Timet lost $3.9 million, or 12 cents per share.

Earnings were hurt by $9.2 million in pretax charges, including a $3.7 million restructiong charge and $3.4 million in equipment-related impairment charges. Sales also declined 22 percent, to $104.7 million. The company has been hurt by a worldwide slump in demand for aerospace materials, and has sued the Boeing Co. for $600 million, alleging breach of its long-term supply contract.

Because of its financial difficulties, Timet announced today it would defer payment of its preferred stock dividends until further notice. Timet is permitted to defer payments for up to five years, though interest will continue to accrue.

At least 10 percent of the workers at Timet's plant in Henderson have been laid off in recent months, as the company sliced 250 jobs from its national payrolls.

LV thrift operator's profit improves

Washington Mutual Inc.'s first-quarter profit rose 3 percent as the largest U.S. savings and loan collected more fees from its customers.

Net income rose to $458.5 million, or 83 cents a share, from $444.1 million, or 76 cents, in the year-earlier period. Per-share results beat the average estimate of 81 cents from analysts surveyed by First Call/Thomson Financial.

Non-interest income rose 20 percent to $423.1 million, led by a 29 percent rise in fees on retail customers. The company added 133,000 retail checking accounts in the quarter.

The company has tried to offset falling revenue from its mortgage business by selling bundles of its loans to investors while trying to attract funds from a broader mix of sources.

"They continue to try to remix their balance sheet away from residential assets and more towards commercial-type assets," said Erick Reim, an analyst at U.S. Bancorp Piper Jaffrey in Minneapolis.

Seattle-based Washington Mutual, which has 2,000 banks, mortgage lending and consumer finance offices, is opening 21 branches designed by the firm that created Ann Taylor retail stores in Las Vegas and Southern Nevada this month, taking advantage of the region's steady economic growth.

Fast-food chain's profit rises

McDonald's Corp.'s profit rose 12 percent in the first quarter as strong sales in North America and Europe helped the fast-food chain beat Wall Street's expectations.

McDonald's earned $450.9 million, or 33 cents a share, in the January-March period, up from $402.7 million, or 29 cents a share, a year ago. Analysts surveyed by First Call/Thomson Financial had forecast earnings of 32 cents a share.

Revenues rose 10 percent to $3.34 billion from $3.04 billion a year ago.

Analysts attributed the Oak Brook, Ill.-based company's robust performance to improvements in its restaurant operations in the United States and Europe, including the $180 million Made For You marketing strategy and computerized cooking program.

Frito-Lay bolster's Pepsi profit

PepsiCo Inc.'s first-quarter earnings rose 10.4 percent as growth in profits at its snack food, juice and international beverage businesses more than offset a decline in the domestic soft drink division blamed on higher prices.

The food and beverage concern earned $422 million, or 29 cents a share, in the three months ended March 18 compared with $333 million, or 22 cents a share, reported a year earlier.

Analysts surveyed by First Call/Thomson Financial expected earnings of 28 cents a share.

Revenue fell to $4.19 billion from $5.11 billion a year ago, but the decline was due to PepsiCo's public offering of a 60 percent stake in its bottling operations. Its revenue was up 8 percent if last year's figures are adjusted to exclude the bottling revenue.

International Paper bids for competitor

International Paper Co., the world's leading paper maker, is bidding $6.2 billion in cash and stock to acquire rival Champion International Corp., hoping to unseat a competing offer from Finnish paper company UPM-Kymmene.

Champion, which is based in Stamford, Conn., had agreed in February to be acquired by the giant European forestry company, but a subsequent 20 percent slide in UPM's share price caused the value of the UPM's all-stock offer to slip from $6.6 billion at the time it was announced to about $5 billion.

The offer announced this morning could trigger a bidding war in the normally staid paper industry, which has had several consolidations recently. Just five days after UPM's merger accord with Champion was announced in February, the Finnish-Swedish forest products company Stora Enso announced a deal to acquire Consolidated Papers Inc. of Wisconsin for about $4 billion.

Software giant's profit up

Microsoft Corp. warned of flat sales and earnings in the fourth quarter after reporting a 24 percent increase in third-quarter profits -- solid gains for any other company, but disappointing for the software giant.

Microsoft said it made $2.39 billion, or 43 cents per share, on sales of $5.66 billion -- a 23 percent increase in revenues -- in the three months ended March 31.

In the same period a year ago, the company made $1.92 billion, or 35 cents per share, on revenues of $4.6 billion.